Lineage tracing follows the progeny of labeled cells through development. This technique identifies precursors of mature cell types in vivo and describes the cell fate restriction steps they undergo in temporal order. In the mouse pancreas, direct cell lineage tracing reveals that Pdx1- expressing progenitors in the early embryo give rise to all pancreatic cells. The progenitors for the mature pancreatic ducts separate from the endocrine/exocrine tissues before E12.5. Expression of Ngn3 and pancreatic polypeptide marks endocrine cell lineages during early embryogenesis, and these cells behave as transient progenitors rather than stem cells. In adults, Ngn3 is expressed within the endocrine islets, and the NGN3+ cells seem to contribute to pancreatic islet renewal. These results indicate the stage at which each progenitor population is restricted to a particular fate and provide markers for isolating progenitors to study their growth, differentiation, and the genes necessary for their development.