The neuregulin (NRG)/epidermal growth factor (EGF) family of growth factors consists of several ligands that specifically activate four erbB receptor-tyrosine kinases, namely erbB-1 (EGF-R), erbB-2 (neu), erbB-3, and erbB-4. We have previously shown that islet morphogenesis is impaired and beta-cell differentiation delayed in mice lacking functional EGF-R [EGF-R (-/-)]. The present study aims to clarify which erbB ligands are important for islet development. Pancreatic expression of EGF, TGF-alpha, heparin-binding EGF, betacellulin (BTC), and NRG-4 was detected as early as embryonic d 13 (E13). Effects of these ligands were studied in E12.5 pancreatic explant cultures grown for 5 d ex vivo. None of the growth factors affected the ratio of endocrine to exocrine cells. However, significant effects within the endocrine cell populations were induced by EGF, BTC, and NRG-4. beta-Cell development was augmented by BTC, whereas the development of somatostatin-expressing delta-cells was stimulated by NRG-4. Both ligands decreased the numbers of glucagon-containing alpha-cells. The effect of BTC was abolished in the EGF-R (-/-) mice. A soluble erbB-4 binding fusion protein totally inhibited the effects of NRG-4 but not of BTC. Neutralization of endogenous NRG-4 activity in the model system effectively inhibited delta-cell development, indicating that this erbB4-ligand is an essential factor for delineation of the somatostatin-producing delta-cells. Our results suggest that ligands of the EGF-R/erbB-1 and erbB-4 receptors regulate the lineage determination of islet cells during pancreatic development. BTC, acting through EGF-R/erbB-1, is important for the differentiation of beta-cells. This could be applied in the targeted differentiation of stem cells into insulin-producing cells.