Pancreatic cancer is characterized by an intense stromal reaction. Reproducible three-dimensional in vitro systems for exploring interactions of the stroma with pancreatic cancer cells have not previously been available, prompting us to develop such a model. Cancer cells were grown on collagen/Matrigel and embedded with or without stromal cells (hTERT-immortalized human PS-1 stellate cells or MRC-5 fibroblasts) for 7 days. Proliferation and apoptosis, as well as important cell-cell adhesion and cytoskeleton-regulating proteins, were studied. PS-1 cells were confirmed as stellate based on the expression of key cytoskeletal proteins and lipid vesicles. Capan-1, and to a lesser extent PaCa-3, cells differentiated into luminal structures, exhibiting a central apoptotic core with a proliferating peripheral rim and an apico-basal polarity. Presence of either stromal cell type translocated Ezrin from apical (when stromal cells were absent) to basal aspects of cancer cells, where it was associated with invasive activity. Interestingly, the presence of 'normal' (not tumor-derived) stromal cells induced total tumor cell number reduction (P < 0.005) associated with a significant decrease in E-cadherin expression (P < 0.005). Conversely, beta-catenin expression was up-regulated (P < 0.01) in the presence of stromal cells with predominant cytoplasmic expression. Moreover, patient samples confirmed that these data recapitulated the clinical situation. In conclusion, pancreatic organotypic culture offers a reproducible, bio-mimetic, three-dimensional in vitro model that allows examination of the interactions between stromal elements and pancreatic cancer cells.