Gastrin is produced by gastric endocrine cells and regulates acid secretion and mucosal cell proliferation. Somatostatin inhibits gastrin secretion, and exogenous somatostatin was recently reported to decrease gastrin gene transcription and to reduce gastrin mRNA stability. Somatostatin cells extend cytoplasmic processes that contact gastrin cells and other cells. Using quantitative in situ hybridization combined with immunocytochemistry, we demonstrate that gastrin cells in close contact (< or = 0.2 micron) with somatostatin cells express significantly lower levels of gastrin mRNA than other gastrin cells. Our data show that cells with high levels of gastrin mRNA and no detectable contacts predominate at the base of the glands. Hence, the results provide evidence that endogenous somatostatin regulates gastrin gene expression in a subpopulation of gastrin cells and point to regulatory heterogeneity of these cells. This represents the first direct microscopic evidence for paracrine gene regulation. The new quantitative double-staining approach may be generally useful for studies of cell interactions and cell sociology.