The transcription factor Pdx1 is required for multiple aspects of pancreatic organogenesis. It remains unclear to what extent Pdx1 expression and function depend upon trans-activation through 5′ conserved cis-regulatory regions and, in particular, whether the mammal-specific Area II (−2139 to −1958 bp) affects minor or major aspects of organogenesis. We show that Area II is a primary effector of endocrine-selective transcription in epithelial multipotent cells, nascent endocrine progenitors, and differentiating and mature β cells in vivo. Pdx1ΔAREAII/− mice exhibit a massive reduction in endocrine progenitor cells and progeny hormone-producing cells, indicating that Area II activity is fundamental to mounting an effective endocrine lineage-specification program within the multipotent cell population. Creating an Area II-deleted state within already specified Neurog3-expressing endocrine progenitor cells increased the proportion of glucagon + α relative to insulin + β cells, associated with the transcriptional and epigenetic derepression of the α-celldetermining Arx gene in endocrine progenitors. There were also glucagon and insulin co-expressing cells, and β cells that were incapable of maturation. Creating the Pdx1 ΔAREAII state after cells entered an insulin-expressing stage led to immature and dysfunctional islet β cells carrying abnormal chromatin marking in vital β-cell-associated genes. Therefore, trans-regulatory integration through Area II mediates a surprisingly extensive range of progenitor and β-cell-specific Pdx1 functions.