The mammalian pancreas is a mixed exocrine and endocrine gland that, in most species, arises from ventral and dorsal buds which subsequently merge to form the pancreas. In both mouse and rat the first histological sign of morphogenesis of the dorsal pancreas is a dorsal evagination of the duodenum at the level of the liver at around the 22-25-somite stage, and shortly thereafter a ventral evagination appears as a derivative of the liver diverticulum. Low levels of insulin gene transcripts are already present and restricted to the dorsal foregut endoderm at 20 somites, suggesting that pancreas- or insulin gene-specific transcriptional factors are present in this region before the onset of morphogenesis. Insulin-promoter-factor 1 (IPF1) is a homeodomain protein which, in the adult mouse pancreas, is selectively expressed in the beta-cells and binds to and transactivates the insulin promoter. In mouse embryos, IPF1 expression is restricted to the developing pancreatic anlagen and is initiated when the foregut endoderm is committed to a pancreatic fate. We now show that mice homozygous for a targeted mutation in the Ipf1 gene selectively lack a pancreas. The mutant pups survive fetal development but die within a few days after birth. The gastrointestinal part and all other internal organs were normal in appearance. No pancreatic tissue and no ectopic expression of insulin or pancreatic amylase could be detected in mutant embryos and neonates. These findings show that IPF1 is needed for the formation of the pancreas and suggest that it acts to determine the fate of common pancreatic precursor cells and/or to regulate their propagation.