All metazoans use insulin to control energy metabolism, but they secrete it from different cells: neurons in the central nervous system in invertebrates and endocrine cells in the gut or pancreas in vertebrates. Despite their origins in different germ layers, all of these insulin-producing cells share common functional features and gene expression patterns. In this study, we tested the role in insulin-producing cells of the vertebrate homologues of Dachshund, a transcriptional regulator that marks the earliest committed progenitors of the neural insulin-producing cells in Drosophila. Both zebrafish and mice expressed a single dominant Dachshund homologue in the pancreatic endocrine lineage, and in both species loss of this homologue reduced the numbers of all islet cell types including the insulin-producing β-cells. In mice, Dach1 gene deletion left the pancreatic progenitor cells unaltered, but blocked the perinatal burst of proliferation of differentiated β-cells that normally generates most of the β-cell mass. In β-cells, Dach1 bound to the promoter of the cell cycle inhibitor p27Kip1, which constrains β-cell proliferation. Taken together, these data demonstrate a conserved role for Dachshund homologues in the production of insulin-producing cells.