During early stages of pancreatic development, the mesenchyme that contributes to the spleen overlies the dorsal pancreatic endoderm. Here, we show that interactions between splenic mesenchyme and pancreas proceed via a highly orchestrated morphogenetic program. Disruption of morphogenesis, as occurs in the Bapx1(Nkx3.2) −/− embryo, results in transformation of these tissues into well-organized, ectopic gut-like structures. Bapx1 plays a crucial organizing role effecting position and separation of the spleen and pancreas to prevent this metaplastic transformation. Similar transformations occur in organ cultures employing wild-type pancreatic endoderm and spleen mesenchyme, revealing the developmental plasticity of the pancreas and that precise spatial and temporal control of tissue interactions are required for development of both organs. Epithelial-mesenchymal interactions are central to the development of the primitive gut tube endoderm and are necessary to form fully functional parts of the gastrointestinal tract. Such interactions come into play in a stepwise manner during development of the dorsal pancreas and begin with patterning signals from the mesectoderm. Later signals from the notochord repress endodermal SHH and thereby permit expression of pancreatic genes in the dorsal pancreatic anlage. Formation of the dorsal aorta will separate the notochord from the pancreatic endoderm and will in turn provide signals that induce insulin expression (Lammert et al. 2001 and references therein). Finally, splanchnic mesenchyme will accumulate around the dorsal pancreatic bud and will promote growth and differentiation of the developing pancreatic epithelium (Kim and Hebrok 2001). Studies indicate that this accumulated mesenchyme provides permissive, rather than instructive, cues (Edlund 2002). Hence, the primary role of the mesenchymal signals at this stage is to stimulate proliferation of the different pancreatic components and not to determine developmental fate. Apart from being important for interaction with underlying epithelium, the mesenchyme surrounding the dorsal pancreas also contributes to development of the spleen during early stages of development ( Fig. 1A; Kanzler and Dear 2001;Hecksher-Sorensen et al. 2004).The mammalian homeobox gene Bapx1 (Nkx3.2) encodes a putative transcription factor that belongs to the Nkx gene family, most similar to the Drosophila homolog bap (Kim and Nirenberg 1989). Bapx1-null mutants show visceral mesoderm defects manifesting as asplenia and impaired pyloric sphincter formation (Lettice et al. 1999;Tribioli and Lufkin 1999;Akazawa et al. 2000). To better understand the dynamic developmental relationships between the spleen and pancreas, we have analyzed the Bapx1-null mutant, a model in which direct interaction between spleen and pancreas can be addressed. Here we show that heterotopic tissue outgrowths with the differentiated characteristics of gut form in the mutant. These are derived from the transformation of pancreatic endoderm and adjacent mesenchyme. Metaplasia w...