Multipotent progenitor cells self renew throughout an animal's lifetime and can differentiate to give rise to different cell types. Before we can fully understand the developmental potential of progenitor cells and control their differentiation both in vivo and in vitro as stem cells, identification and characterization of the genes that control stem cell fate must first be obtained. Foxd3, a member of the forkhead family of transcriptional regulators, is required for the maintenance of embryonic stem cells and trophoblast stem cells of the early mouse embryo. We describe here the expression of this protein in the developing pancreas. Foxd3 is expressed in most beta cells and infrequently in alpha and PP cells but is not expressed in somatostatin cells. The subcellular localization of Foxd3 varies with fat content in the diet; with a high fat diet the protein is found primarily in the cytoplasm while a low fat diet results in nuclear localization. Foxd3 is differentially localized in a rat model of diabetes: it is nuclear in ZDF rats but cytoplasmic in their lean counterparts. Foxd3 is nuclear in Lep(Ob/Ob) mice.