Fanconi anemia (FA) is a genetically heterogeneous, autosomal recessive disorder characterized by a variety of congenital and skeletal malformations, progressive pancytopaenia and predisposition to malignancies. While the basic defect in this disease is not known, the cloning of the gene defective in FA group C patients (FAC) allows analysis of its expression pattern, which may provide clues about the functional properties of the protein. This paper describes the distribution of Fac transcripts during murine development (8-19.5 days p.c.), using RNA in situ hybridization. Fac is initially expressed (8-10 days p.c.) in the mesenchyme and its derivatives with osteogenic potential. The transcript is also apparent at later stages of bone development (13-19.5 days p.c.), localized to cells of the inner perichondrium, periosteum and zone of endochondral ossification. In the latter, Fac transcripts are seen in cells from both osteogenic and hematopoietic lineages. Fac mRNA is also seen in intramembranous cranial and facial bones. In addition, Fac signal is detected in non-skeletal tissues: brain, whisker follicles, lung, kidney, gut and stomach. Fac expression is high in progenitor cell populations but is downregulated in differentiating cells that give rise to connective tissue. The pattern of Fac expression is consistent with the skeletal and non-skeletal congenital abnormalities in FA patients. As well, expression in rapidly dividing progenitors is consistent with hypotheses regarding the nature of the basic defect in FA: a role of the protein in DNA repair or protection from oxygen toxicity.