To investigate the role of the Sry/hydroxymethylglutaryl box (Sox) transcription factors in the development of the pancreas, we determined the expression pattern of Sox factors in the developing mouse pancreas. By RT-PCR, we detected the presence of multiple Sox family members in both the developing pancreas and mature islets and then focused on two factors, Sox2 and Sox4. The expression field of Sox2, which plays a role in the maintenance of some stem cell populations, included the developing duodenum, but Sox2 was specifically excluded from the pancreatic buds. In contrast, Sox4 was detected broadly in the early pancreatic buds and eventually became restricted to the nuclei of all islet cells in the adult mouse. Mice homozygous for a null mutation of the sox4 gene showed normal pancreatic bud formation and endocrine cell differentiation up to embryonic day 12.5. Beyond that date, cultured pancreatic explants lacking sox4 failed to form normal islets. Instead, a markedly reduced number of endocrine cells were found scattered through the explant. We show here that several Sox transcription factors are expressed in the developing pancreas and in the islet, and that one of these factors, Sox4, is required for the normal development of pancreatic islets.