OBJECTIVE—The generation of distinct cell types during the development of the pancreas depends on sequential changes in gene expression. We tested the hypothesis that microRNAs (miRNAs), which limit gene expression through posttranscriptional silencing, modulate the gene expression cascades involved in pancreas development. RESEARCH DESIGN AND METHODS—miRNAs were cloned and sequenced from developing pancreata, and expression of a subset of these genes was tested using locked nucleic acid in situ analyses. To assess the overall contribution of miRNAs to pancreatic development, Dicer1, an enzyme required for miRNA processing, was conditionally deleted from the developing pancreas. RESULTS—Sequencing of small RNAs identified over 125 miRNAs, including 18 novel sequences, with distinct expression domains within the developing pancreas. To test the developmental contribution of these miRNAs, we conditionally deleted the miRNA processing enzyme Dicer1 early in pancreas development. Dicer-null animals displayed gross defects in all pancreatic lineages, although the endocrine cells, and especially the insulin-producing β-cells, were most dramatically reduced. The endocrine defect was associated with an increase in the notch-signaling target Hes1 and a reduction in the formation of endocrine cell progenitors expressing the Hes1 target gene neurogenin3. CONCLUSIONS—The expression of a unique profile of miRNAs is required during pancreas development and is necessary for β-cell formation.