All pancreatic cell types (endocrine, exocrine, and ductal) are derived from the same endodermal dorsal and ventral anlage, which grow together to form the definitive pancreas. Golosow and Grobstein were pioneers in the field of pancreatic developmental research, as were Wessells and Cohen, who already in the 1960s performed classic embryological experiments describing the morphogenesis of the pancreas and the epithelio-mesenchymal interactions that are instrumental for proper pancreas development. Recent findings suggest that follistatin and fibroblast growth factors represent some of these key mesenchymal factors that actively promote at least pancreatic exocrine development. The true endodermal origin of the pancreatic endocrine cells became evident by experiments performed by the groups of LeDouarin and Rutter in the 1970s. The newly acquired insights regarding the specification of pancreatic endocrine cells as controlled by the notch signaling pathway (i.e., similar to the mechanisms by which neurons are specified during neurogenesis) have provided a novel understanding of the long acknowledged similarities between neurons and the pancreatic endocrine cells. Last, the identification of a number of distinct transcription factors operating at various levels of pancreatic development and in different cell types has provided useful information both on pancreas development and on various pancreatic disorders such as diabetes. Interestingly, four of the hitherto defined five different maturity-onset diabetes of the young (MODY) genes correspond to transcription factors, and, in addition, several transcription factors have also been linked to type 2 diabetes.