The origin of pancreatic endocrine cells is unknown. Some studies have suggested that there is a common pancreatic progenitor which gives rise to both endocrine and exocrine cells, while others have suggested separate endocrine and exocrine lineages. Previous conclusions have been based on indirect data, such as the co-expression of molecular markers. We directly assessed the relationship between endocrine and exocrine cells during development using a lineage tracer. A replication-incompetent retrovirus was used to introduce the reporter gene alkaline phosphatase into single cells in explants of mouse embryonic pancreas. After a week in culture, the subsequent fate of the infected cells could then be determined. The results show that a common pancreatic progenitor cell exists, which gives rise to both endocrine and exocrine cells.