The endocrine pancreas undergoes major remodeling during neonatal development when replication of differentiated β cells is the major mechanism by which β cell mass is regulated. The molecular mechanisms that govern the replication of terminally differentiated β cells are unclear. We show that during neonatal development, cyclin D2 expression in the endocrine pancreas coincides with the replication of endocrine cells and a massive increase in islet mass. Using cyclin D2^–/– mice, we demonstrate that cyclin D2 is required for the replication of endocrine cells but is expendable for exocrine and ductal cell replication. As a result, 14-day-old cyclin D2^–/– mice display dramatically smaller islets and a 4-fold reduction in β cell mass in comparison to their WT littermates. Consistent with these morphological findings, the cyclin D2^–/– mice are glucose intolerant. These results suggest that cyclin D2 plays a key role in regulating the transition of β cells from quiescence to replication and may provide a target for the development of therapeutic strategies to induce expansion and/or regeneration of β cells.