The gastrointestinal hormone peptide YY is a potent inhibitor of food intake and is expressed early during differentiation of intestinal and pancreatic endocrine cells. In order to better understand the role of peptide YY in energy homeostasis and development, we created mice with a targeted deletion of the peptide YY gene. All intestinal and pancreatic endocrine cells developed normally in the absence of peptide YY with the exception of pancreatic polypeptide (PP) cells, indicating that peptide YY expression was not required for terminal differentiation. We used recombination-based cell lineage trace to determine if peptide YY cells were progenitors for gastrointestinal endocrine cells. Peptide YY(+) cells gave rise to all L-type enteroendocrine cells and to islet partial differential and PP cells. In the pancreas, approximately 40% of pancreatic alpha and rare beta cells arose from peptide YY(+) cells, suggesting that most beta cells and surprisingly the majority of alpha cells are not descendants of peptide YY(+)/glucagon-positive/insulin-positive cells that appear during early pancreagenesis. Despite the anorectic effects of exogenous peptide YY(3-36) following intraperitoneal administration, mice lacking peptide YY showed normal growth, food intake, energy expenditure, and responsiveness to peptide YY(3-36). These observations suggest that targeted disruption of the peptide YY gene does not perturb terminal endocrine cell differentiation or the control of food intake and energy homeostasis.