Germ-line mutation of the von Hippel-Lindau (VHL) gene predisposes to the development of multifocal, benign lesions, including retinal and central nervous system hemangioblastomas, pheochromocytomas, and renal and pancreatic cysts. Progression to malignancy in VHL disease is associated primarily with the development of renal cell carcinoma (RCC) and pancreatic islet cell tumors (PICT). Although many reports have documented the multiple functions of the VHL protein, few have investigated the intriguing question related to the tissue-specificity of malignant conversion in VHL disease, a problem not easily explained by strict genotype-phenotype correlations. We investigated a novel VHL kindred with a preponderance of PICTs to determine whether loss of additional genetic loci associated with the sporadic forms of RCC and PICTs might play a role in malignant conversion in this disease. We report the high frequency loss of heterozygosity (LOH) of genetic loci distinct from and mapping proximal to VHL within human chromosome 3p in the VHL kindred under study. Furthermore, chromosome 3p LOH occurs subsequent to VHL mutation and cyst formation, and correlates with malignant progression in VHL-associated PICTs. High frequency LOH was also observed in sporadic PICTs in regions of 3p associated with LOH in sporadic clear cell RCC as well as homozygous deletion in lung cancer. A stepwise model for malignant conversion in VHL disease is herein proposed.