AbstractThe hypothesis is put forward that the localized production of growth factors and the regulation both of their receptors and their receptor‐triggered transmembrane signaling reactions played an important role in organ development. The developing palate is used as an example to support this hypothesis. Data are summarized to demonstrate that during palatogenesis, there are variations in the amount of fetal epidermal growth factor‐urogastrone (EGF‐URO), in the amount of EGFURO receptor, and that there is a developmentally regulated variation in cellular responsiveness to EGF‐URO. Further, it is demonstrated that the growth factor EGF‐URO itself can regulate the production by palate tissue of a second growth factor, insulin‐like growth factor (IGF). The multiple actions of the many so‐called growth factors, quite apart from their ability to regulate cell growth are pointed out; and the implications of the many distinct actions of a single growth factor on a single cell type are discussed in the context of a developmental process like palate formation. A model is developed to illustrate the kinds of interactive processes that may occur in a tissue microenvironment during a developmental process, involving cell‐cell communication and an influence of the extracellular matrix.