Endocrine differentiation in the early embryonic pancreas is regulated by Notch signaling. Activated Notch signaling maintains pancreatic progenitor cells in an undifferentiated state, whereas suppression of Notch leads to endocrine cell differentiation. Yet it is not known what mechanism is employed to inactivate Notch in a correct number of precursor cells to balance progenitor proliferation and differentiation. We report that an established Notch modifier, Manic Fringe (Mfng), is expressed in the putative endocrine progenitors, but not in exocrine pancreatic tissues, during early islet differentiation. Using chicken embryonic endoderm as an assaying system, we found that ectopic Mfng expression is sufficient to induce endodermal cells to differentiate towards an endocrine fate. This endocrine-inducing activity depends on inactivation of Notch. Furthermore, ectopic Mfng expression induces the expression of basic helix-loop-helix gene, Ngn3, and two zinc finger genes, cMyt1 and cMyt3. These results suggest that Mfng-mediated repression of Notch signaling could serve as a trigger for endocrine islet differentiation.