A tyrosine phosphatase-like protein, IA-2, is a major autoantigen in Type 1 diabetes but its role in islet function is unclear. Tyrosine phosphorylation mediates regulation of cellular processes such as exocytosis, cell growth, and cell differentiation. To investigate the potential involvement of IA-2 in islet differentiation and insulin secretion, we analyzed by immunohistochemistry expression of IA-2 during islet development in fetal rats and during the maturation of insulin secretory responses after birth. In the fetus, IA-2 immunoreactivity was detected in primitive islets positive for insulin and glucagon at 12 days' gestation. Subsequently, IA-2 was only weakly detectable in the fetal pancreas. In neonatal rat, a progressive increase in IA-2 immunoreactivity was observed in islets from very low levels at 1 day of age to moderate labeling at 10 days. In the adult, relatively high levels of IA-2 were detected in islets, with heterogeneous expression in individual cells within each islet. IA-2 marks a population of endocrine cells that transiently appear early in pancreatic ontogeny. Islet IA-2 expression reappears after birth concomitant with the development of mature insulin secretory responses, consistent with a role for this protein in regulated hormone secretion.