Many transcription factors are critical for ensuring proper embryonic development of the endocrine pancreas and normal islet function. The transcription factor pancreatic duodenal homeobox 1 (PDX-1) is uniformly expressed in early pancreatic buds of embryos as well as the beta and delta cells of the islets of Langerhans. PDX-1 has also been found in dispersed endocrine cells of the duodenum in adults and plays a key role in pancreas formation. It has been reported that null mutation of PDX-1 in mice results in a failure of the pancreatic bud to expand; thus, the mice die 2-3 days after birth from hyperglycemia and dehydration. Heterozygous PDX-1 mice developed a pancreas but were diabetic. It has been shown that PDX-1 is required for maintaining the pancreatic islet functions by activating gene transcriptions including insulin, somatostatin (SST), islet amyloid polypeptide, glucose transporter type 2, and glucokinase. PDX-1 serves a dual role in pancreatic development. It initially contributes to pancreatic formation during embryogenesis and subsequently regulates the pancreatic islet cell physiology in mature islet cells. Understanding the underlying molecular mechanisms of pancreas formation, especially the function of PDX-1, may contribute to the enhanced treatment and prevention of debilitating diseases such as diabetes, insulinomas, and pancreatic carcinomas.