We are interested in the regulation of early pancreatic differentiation, particularly with regard to factors that enhance insulin cell proliferation. Both retinoic acid and insulin-like growth factor 1 (IGF-1) are known to be important in the proliferation and differentiation of insulin cells. Individually, they have the ability to increase the proportion of insulin cells when added to cultures of chick dorsal pancreatic buds. The aim of this study was to define the action of retinoic acid (RA) in combination with IGF-1 on the proportion of insulin cells. The dorsal pancreatic bud of 5-day-old chick embryos was excised and the endodermal component, with minimal adherent mesenchyme, was explanted onto Matrigel. RA (10–6 M) and IGF-1 (50 ng/ml) were added to Ham’s F12 culture medium containing transferrin (5 µg/ml) and selenium (10–10 M) (F12.TS). Control explants were cultured in F12.TS alone or in F12.TS containing dimethyl sulphoxide (DMSO) [F12.TS (DMSO)]. After 7 days in culture, insulin and glucagon cells were localized immunocytochemically; numbers of insulin cells were expressed as a percentage of insulin plus glucagon cell counts. Addition of RA plus IGF-1 to the medium increased the proportion of insulin cells markedly (23.43%) compared with the proportions in control explants (11.3% with F12.TS (DMSO), 13.2% with F12.TS). This increase represents a more than twofold increase in the proportion of insulin cells over that of control explants.