Midgut stem cells of last instar larvae and pupae of Heliothis virescens, Lymantria dispar and several other Lepidopteran species have been cultured in vitro and have been induced to proliferate using low titers of ecdysteroids and the 77-Kda peptide fragment, a-arylphorin, isolated and identified from pupal fat body tissue. The insulin-related hormone, Bombyxin, also induced mitosis in cultured midgut stem cells; it appeared to be fast-acting and quickly inactivated, while a-arylphorin was slower to act and had a longer lasting effect in vitro, indicating different functions for these proliferation agents. Changes in Calcium ion concentration within or outside the cells discretely affected stem cell differentiation, indicating a role for second messenger participation in peptide regulation of this process. Four different peptides (MDFs 1-4) that induced midgut stem cells to differentiate to mature midgut cell types in vitro were isolated and characterized from conditioned media and hemolymph of H. virescens and L. dispar. However, platelet-derived growth factor (PDGF), epidermal growth factor (EGF), and all-trans retinoic acid (RA) from vertebrate sources induced differentiation to nonmidgut cell types as well. MDF1 was located in basal areas of columnar cells of midgut epithelium, although MDF2 was observed in all of the cytoplasm of columnar cells and in droplets of antibody positive material in the midgut lumen, suggesting a digestive function as well for this Mention of a trademark or proprietary product does not constitute a guarantee or warranty of the product by the USDA and does not imply its approval to the exclusion of other products that may also be suitable. Correspondence to: Marcia J. Loeb, 6920 Fairfax Rd.,