This paper reports on how lymphatic vessels and their smooth muscle cells develop in the diaphragm of postnatal rats. Lymphatic endothelial cells in the diaphragm were labeled by an intraperitoneal injection of DiI-labeled acetylated low-density lipoprotein (DiI-ac-LDL). During postnatal week 1, DiI-ac-LDL was detected in many free cells in addition to distinct endothelial cells that formed lymphatic vessels. Occasionally, saccular lymphatics isolated from previously formed lymphatics were recognized; these were referred to as lymphatic islands. The DiI-ac-LDL-labeled free and lymphatic endothelial cells showed immunoreactivity for CD 34 and Flt-4, but most of them did not express either OX 62 or ED 1 immunoreactivity, with only some showing ED 1 immunoreactivity. This suggests that most of the DiI-ac-LDL-labeled elements were lymphatic endothelial cells, and that some were macrophages. After postnatal week 1, the DiI-ac-LDL positive cells were restricted to lymphatic vessels. Until postnatal week 6, Iymphatic vessels increased as the diaphragm enlarged. Towards the end of postnatal week 2, free cells expressing α-smooth muscle actin (α-SMA) immunoreactivity increased in the diaphragm, and some of these were in contact with lymphatics. A coarse plexus of smooth muscle cells surrounding the lymphatic vessels first appeared at postnatal week 2, and this plexus became denser with age. Our findings indicate that lymphatic vessels are formed not only by sprouting from previously formed lymphatic vessels but also by migrating endothelial cells, and that smooth muscle cells may be differentiated from mesenchymal cells to form a plexus surrounding the lymphatic vessels.