The epithelium of the digestive tract contains endocrine cells which produce serotonin and an array of regulatory peptides. It is now irrefutably established that gut endocrine cells are not of neural crest nor even of neurectodermal origin. Furthermore, the proposal that they might originate from neuroendocrine-programmed epiblast has been retused by recent evidence that they share the endodermal stem cell pool with the other epithelial cells of the gut. Based on the available evidence, a working hypothesis for the differentiation of gut endocrine cells has been developed. It is proposed that initially the developing gut acquires an underlying tendency to differentiate into intestine: the endoderm has the potential to form a wide range of endocrine cell types. A little later, some influence operative over the length of the presumptive gut imposes a regionally specific pattern on the tract. This process concerns morphogenesis and pre-selection of the range and proportions of the endocrine cell types. Thereafter, the mesenchyme feeds to the endoderm confirmatory signals reinforcing this pre-selected regional pattern of endocrine cells. Once the different endocrine cell types have started to differentiate, their maturation is effected by circulating factors which include glucocorticoid hormone: this process is mediated by the mesenchyme. Other factors concerned at various stages of gut endocrine cell differentiation could be other hormones, growth factors and or components of extracellular matrix: such factors are still untested in this context.