Although p53 is not essential for normal embryonic development, it plays a pivotal role in many biological and pathological processes, including cell fate determination-dependent and independent events and diseases. The expression and activity of p53 largely depend on its two biological inhibitors, MDM2 and MDMX, which have been shown to form a complex in order to tightly control p53 to an undetectable level during early stages of embryonic development. However, more delicate studies using conditional gene-modification mouse models show that MDM2 and MDMX may function separately or synergistically on p53 regulation during later stages of embryonic development and adulthood in a cell and tissue-specific manner. Here, we report the role of the MDM2/MDMX-p53 pathway in pancreatic islet morphogenesis and functional maintenance, using mouse lines with specific deletion of MDM2 or MDMX in pancreatic endocrine progenitor cells. Interestingly, deletion of MDM2 results in defects of embryonic endocrine pancreas development, followed by neonatal hyperglycemia and lethality, by inducing pancreatic progenitor cell apoptosis and inhibiting cell proliferation. However, unlike MDM2-knockout animals, mice lacking MDMX in endocrine progenitor cells develop normally. But, surprisingly, the survival rate of adult MDMX-knockout mice drastically declines compared to control mice, as blockage of neonatal development of endocrine pancreas by inhibition of cell proliferation and subsequent islet dysfunction and hyperglycemia eventually lead to type 1 diabetes-like disease with advanced diabetic nephropathy. As expected, both MDM2 and MDMX deletion-caused pancreatic defects are completely rescued by loss of p53, verifying the crucial role of the MDM2 and/or MDMX in regulating p53 in a spatio-temporal manner during the development, functional maintenance, and related disease progress of endocrine pancreas. Also, our study suggests a possible mouse model of advanced diabetic nephropathy, which is complementary to other established diabetic models and perhaps useful for the development of anti-diabetes therapies.