The Pax-gene family encodes a group of transcription factors characterized by the presence of a highly conserved DNA-binding motif, the paired domain. Pax proteins are key regulators of vertebrate organogenesis since they play major roles in embryonic pattern formation, cell proliferation and cell differentiation (Chi and Epstein, 2002; Dahl et al., 1997; Dohrman et al., 2000; Epstein et al., 1994). Indeed, mutations in Pax genes lead to profound defects in organisms as diverse as flies, mice and humans (Chi and Epstein, 2002; Dahl et al., 1997). To date, nine mammalian Pax genes are known and these are grouped into five different subclasses according to their structural similarities. One of these subclasses comprises two close homologues, Pax4 and Pax6, that contain a second DNA-binding domain: the homeodomain (Dahl et al., 1997; Dohrman et al., 2000). Previous studies showed that Pax4 is a crucial regulator of mammalian pancreas development since lack of its activity prevents the formation of mature pancreatic insulin-producing (beta) cells (Dohrman et al., 2000; Sosa-Pineda et al., 1997; Wang et al., 2004). Presently, it is not yet clear how Pax4 is specifically required for the development of beta cells. Nonetheless, evidence gathered from recent studies has begun to unravel important aspects of the molecular function of Pax4 in pancreatic endocrine cells. Here, I will try to summarize the results of different efforts aimed at understanding how Pax4 is required for both, beta cell development and beta cell function.