Considerable knowledge of the ontogeny of the endocrine pancreas has been gained in recent years, mainly through the use of two complementary genetic approaches in transgenic mice: gene inactivation or over-expression (to assess gene function) and genetic labeling of precursor cells (to determine cell lineages). In recent years, in vivo Cre/IoxP-based direct cell tracing experiments show that (i) all pancreatic cells differentiate from pdx1-expressing precursors, (ii) p48 is involved in the exocrine and endocrine pancreatic lineages, (iii) islet endocrine cells derive from ngn3-expressing progenitor cells, and (iv) insulin cells do not derive from glucagon-expressing progenitors. Lineage analyses allow the identification of progenitor cells from which mature cell types differentiate. Once identified, such progenitors can be labeled and isolated, and their differentiation and gene expression profiles studied in vitro. Understanding pancreatic cell lineages is highly relevant for future cell replacement therapies in diabetic patients, helping to define the identity of putative (endodermal) pancreatic stem cells.