The homeodomain protein PDX-1 is critical for pancreas development and is a key regulator of insulin gene expression. PDX-1 nullizygosity and haploinsufficiency in mice and humans results in pancreatic agenesis and diabetes, respectively. At embryonic day (e) 10.5, PDX-1 is expressed in all pluripotential gut-derived epithelial cells destined to differentiate into the exocrine and endocrine pancreas. At e15, PDX-1 expression is downregulated in exocrine cells, but remains high in endocrine cells. The aim of this study was to determine whether targeted overexpression of PDX-1 to the exocrine compartment of the developing pancreas at e15 would allow for respecification of the exocrine cells. Transgenic (TG) mice were generated in which PDX-1 was expressed in the exocrine pancreas using the exocrine-specific elastase-1 promoter. These mice exhibited a marked dysmorphogenesis of the exocrine pancreas, manifested by increased rates of replication and apoptosis in acinar cells and a progressive fatty infiltration of the exocrine pancreas with age. Interestingly, the TG mice exhibited improved glucose tolerance, but absolute beta-cell mass was not increased. These findings indicate that downregulation of PDX-1 is required for the proper maintenance of the exocrine cell phenotype and that upregulation of PDX-1 in acinar cells affects beta-cell function. The mechanisms underlying these observations remain to be elucidated.