Mice carrying loss-of-function mutations in certain Notch pathway genes display increased and accelerated pancreatic endocrine development, leading to depletion of precursor cells followed by pancreatic hypoplasia. Here, we have investigated the effect of expressing a constitutively active form of the Notch1 receptor (Notch1(ICD)) in the developing pancreas using the pdx1 promoter. At e10.5 to e12.5, we observe a disorganized pancreatic epithelium with reduced numbers of endocrine cells, confirming a repressive activity of Notch1 upon the early differentiation program. Subsequent branching morphogenesis is impaired and the pancreatic epithelium forms cyst-like structures with ductal phenotype containing a few endocrine cells but completely devoid of acinar cells. The endocrine cells that do form show abnormal expression of cell type-specific markers. Our observations show that sustained Notch1 signaling not only significantly represses endocrine development, but also fully prevents pancreatic exocrine development, suggesting that a possible role of Notch1 is to maintain the undifferentiated state of common pancreatic precursor cells.