To investigate the precise role of Notch/Rbp-j signaling in the pancreas, we inactivated Rbp-j by crossing Rbp-j floxed mice with Pdx.cre or Rip.cre transgenic mice. The loss of Rbp-j at the initial stage of pancreatic development induced accelerated alpha and PP cell differentiation and a concomitant decrease in the number of Neurogenin3 (Ngn3)-positive cells at E11.5. Then at E15, elongated tubular structures expressing ductal cell markers were evident; however, differentiation of acinar and all types of endocrine cells were reduced. During later embryonic stages, compensatory acinar cell differentiation was observed. The resultant mice exhibited insulin-deficient diabetes with both endocrine and exocrine pancreatic hypoplasia. In contrast, the loss of Rbp-j specifically in beta cells did not affect beta cell number and function. Thus, our analyses indicate that Notch/Rbp-j signaling prevents premature differentiation of pancreatic progenitor cells into endocrine and ductal cells during early development of the pancreas.