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Developmental biology is challenged to reveal the function of numerous candidate genes implicated by recent genome-scale studies as regulators of organ development and diseases. Recapitulating organogenesis from purified progenitor cells that can be genetically manipulated would provide powerful opportunities to dissect such gene functions. Here we describe systems for reconstructing pancreas development, including islet β-cell and α-cell differentiation, from single fetal progenitor cells. A strict requirement for native genetic regulators of in vivo pancreas development, such as Ngn3, Arx, and Pax4, revealed the authenticity of differentiation programs in vitro. Efficient genetic screens permitted by this system revealed that Prdm16 is required for pancreatic islet development in vivo. Discovering the function of genes regulating pancreas development with our system should enrich strategies for regenerating islets for treating diabetes mellitus.