Both retinoic acid (RA) and transforming growth factor (TGF)-β1 are known to be influential in the development of insulin cells. Respectively, they increase and decrease the proportion of insulin cells when added to cultures of embryonic chick dorsal pancreatic buds. The aim of this study was to define the action of RA in the presence of decreased levels of TGF-β1, as are found in growth factor–reduced Matrigel (GFRM), on the proportion of insulin cells. The endodermal component of 5-d chick dorsal pancreatic buds was explanted on to GFRM. Retinoic acid (10⁻⁶ M) was added to Ham's F12 culture medium containing insulin (5 μg/ml), transferrin (5 μg/ml), and selenium (10⁻¹⁰ M) (F12.ITS). Control explants were cultured in F12.ITS alone or in F12.ITS containing dimethyl sulfoxide (DMSO). After 7 d in culture, insulin and glucagon cells were localized immunocytochemically; changes in numbers of insulin cells were expressed as a percentage of insulin plus glucagon cells. Medium containing RA or DMSO increased the proportion of insulin cells significantly compared with the proportion in the explants cultured in F12.ITS medium alone.