The pS2 gene encodes for a small cysteine-rich protein, and was originally found by differential screening of a cDNA library from the human breast carcinoma cell line, MCF-7. The presence of pS2 is closely correlated with oestrogen dependence in breast carcinomas. While the function of pS2 is unknown, pS2 protein has been shown to be homologous with the gastrointestinal peptide hormone pancreatic spasmolytic polypeptide (PSP) and its human counterpart hSP, in which a 5-cysteine domain is tandemly repeated. The 5' flanking region of the pS2 gene contains an enhancer region responsive to oestrogens and to epidermal growth factor (EGF/URO). We now report that pS2 and hSP expression occurs in a wide range of endodermally-derived tissues, including the duodenum, the pancreas, and in a recently defined cell lineage associated with chronic gastrointestinal ulceration. In each case, this expression was associated with secretion of immunoreactive EGF/URO. We further show that the co-expression of pS2 and hSP in gastric surface epithelial cells is also associated with the secretion of EGF/URO in the subjacent mucous neck cells. Our results indicate that local EGF/URO secretion induces pS2 and hSP in adjacent cells, and that these molecules are then available to participate in pathophysiological responses. The finding of similar patterns of EGF/URO, hSP and pS2 expression in association with chronic damage suggests that this is a fundamental response in the healing of these tissues.