During early pancreatic development, Notch signaling represses differentiation of endocrine cells and promotes proliferation of Nkx6-1(+)Ptf1a(+) multipotent progenitor cells (MPCs). Later, antagonistic interactions between Nkx6 transcription factors and Ptf1a function to segregate MPCs into distal Nkx6-1(-)Ptf1a(+) acinar progenitors and proximal Nkx6-1(+)Ptf1a(-) duct and beta-cell progenitors. Distal cells are initially multipotent, but evolve into unipotent, acinar cell progenitors. Conversely, proximal cells are bipotent and give rise to duct cells and late-born endocrine cells, including the insulin producing beta-cells. However, signals that regulate proximodistal (P-D) patterning and thus formation of beta-cell progenitors are unknown. Here we show that Mind bomb 1 (Mib1) is required for correct P-D patterning of the developing pancreas and beta-cell formation. We found that endoderm-specific inactivation of Mib1 caused a loss of Nkx6-1(+)Ptf1a(-) and Hnf1 beta(+) cells and a corresponding loss of Neurog3(+) endocrine progenitors and beta-cells. An accompanying increase in Nkx6-1(-)Ptf1a(+) and amylase(+) cells, occupying the proximal domain, suggests that proximal cells adopt a distal fate in the absence of Mib1 activity. Impeding Notch-mediated transcriptional activation by conditional expression of dominant negative Mastermind-like 1 (Maml1) resulted in a similarly distorted P-D patterning and suppressed beta-cell formation, as did conditional inactivation of the Notch target gene Hes1. Our results reveal iterative use of Notch in pancreatic development to ensure correct P-D patterning and adequate beta-cell formation.