Factor XIIIa (FXIIIa), a coagulation transglutaminase, is a cytoplasmic marker for dermal dendritic cells reported to be bone marrow-derived, phagocytic and antigen-presenting. In non-inflamed skin, these cells populate the papillary dermis in a perivascular distribution. They are increased in dermatoproliferative disorders and have been implicated as dermal stimulants for psoriatic hyperkeratosis. Since developing skin provides an example of dermal influence on the epidermis, we evaluated the presence of FXIIIa+ cells in human fetal skin to determine whether their location would suggest a role in morphogenetic events in the skin. Embryonic and fetal skin of progressive estimated gestational ages (EGA) was examined using immunocytochemistry with a polyclonal antibody to FXIIIa. At 6 weeks EGA, globular FXIIa+ cells were present in the hypodermis. By 7-8 weeks, a compact sub-epidermal network of fusiform FXIIIa+ cells was also evident. By 11-12 weeks, the sub-epidermal cellular network was no longer FXIIIa+, but discrete FXIIIa+ dendritic cells were present in the reticular dermis. With advancing gestational age, FXIIIa+ dendritic cells populated the papillary dermis in a perivascular distribution. This adult-like distribution persisted through 22 weeks EGA, the oldest specimen examined. Because FXIIIa+ cells were evident in embryonic skin before the onset of bone marrow hematopoietic function, the skin was double-labeled with the FXIIIa antibody and with monoclonal antibodies to CD45 (marker for bone marrow-derived cells), CD68 (marker for macrophages) and HLA-DR (class II major histocompatibility antigen). Most of the FXIIIa+ dendritic cells did not colocalize CD45, but were CD68+; some cells did react with the HLA-DR antibody. Notably, the FXIIIa+ cells of the sub-epidermal network in the 7 weeks EGA specimens did not react with the other antibodies. We conclude that FXIIIa+ cells are first present in embryonic hypodermis and sub-epidermal dermis and later they are distributed in the papillary dermis in a perivascular pattern. In embryonic skin FXIIIa+ cells are not exclusively dendritic. Our data support the idea that cells that express FXIIIa do not constitute a unique bone marrow-derived cell type, but that multiple cell types produce FXIIIa.