Considerable progress has been made in the understanding of the sequential activation of signal transduction pathways and the expression of transcription factors during pancreas development. Much of this understanding has been obtained by analyses of the phenotypes of mice in which the expression of key genes has been disrupted (knockout mice). Knockout of the genes for Pdx1, Hlxb9, Isl1, or Hex results in an arrest of pancreas development at a very early stage (embryonic d 8-9). Disruption of genes encoding components of the Notch signaling pathway, e.g. Hes1 or neurogenin-3, abrogates development of the endocrine pancreas (islets of Langerhans). Disruption of transcription factor genes expressed more downstream in the developmental cascade (Beta2/NeuroD, Pax4, NKx2.2, and Nkx6.1) curtails the formation of insulin-producing beta-cells. An understanding of the importance of transcription factor genes during pancreas development has provided insights into the pathogenesis of diabetes, in which the mass of insulin-producing beta-cells is reduced.