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Multiple cell types of the pancreas appear asynchronously during embryogenesis, which requires that pancreatic progenitor cell potential changes over time. Loss-of-function studies have shown that Notch signaling modulates the differentiation of these progenitors, but it remains unclear how and when the Notch pathway acts. We established a modular transgenic system to heritably activate mouse Notch1 in multiple types of progenitors and differentiated cells. We find that misexpression of activated Notch in Pdx1-expressing progenitor cells prevents differentiation of both exocrine and endocrine lineages. Progenitors remain trapped in an undifferentiated state even if Notch activation occurs long after the pancreas has been specified. Furthermore, endocrine differentiation is associated with escape from this activity, because Ngn3-expressing endocrine precursors are susceptible to Notch inhibition, whereas fully differentiated endocrine cells are resistant.