Transgenic rats carrying a PEPCK-SV40 large T-antigen (TAg) transgene rapidly develop numerous pancreatic islet cell neoplasms, the cells of which express TAg. Although many of the larger neoplasms contain relatively undifferentiated cells, many tumors contain areas of well-differentiated cells with abundant endoplasmic reticulum (ER) and secretory granules for endocrine hormones like those observed in normal pancreatic islets. In the well-differentiated lesions, glucagon-producing alpha-cells, insulin-producing beta-cells, and somatostatin-producing delta-cells are readily identifiable morphologically under the electron microscope. Beta-cells were observed in all normal and hyperplastic islets, and nests of these cells were scattered throughout the larger neoplasms. These nests varied from small clusters of epithelium-like cells that stain intensely for insulin, to sheets of small, basophilic cells that stain more diffusely for the hormone. Alpha-cells were also present in all of the normal and hyperplastic islets, but in larger hyperplastic islets, the peripheral localization was absent. Larger neoplasms contained many nests of glucagon-expressing cells, as well as scattered glucagon-producing single cells. Delta-cells were rarely observed in the hyperplastic islets and in the neoplasms. Blood-glucose levels were unaltered in the transgenic animals relative to their nontransgenic litter mates. Thus although these islet cell neoplasms express several polypeptide hormones, there is no obvious clinical effect of such expression in vivo.