Using immortalized human pancreatic endocrine cell lines, we have shown previously that differentiation into hormone-expressing cells requires cell-cell contact acting in synergy with the homeodomain transcription factor pancreatic duodenal homeobox-1 (PDX-1). Although differentiation is associated with a decrease in cell proliferation, the mechanisms behind this relationship are not known. Using TRM-6, a δ cell line, and βlox5, a β-cell line, we show here that cell-cell contact and subsequent endocrine differentiation lead to a down-regulation of the c-myc protooncogene. Overexpression of c-Myc obtained with an inducible c-Myc-estrogen receptor fusion protein results in an increase in cell proliferation and the ablation of hormone expression. Moreover, we show that although c-Myc is expressed in a subset of cells from the human fetal and adult pancreas, it is absent in differentiated endocrine cells. The mechanism by which c-Myc interferes with hormone expression may be through effects on the homeodomain transcription factor PDX-1, as immunostaining for PDX-1 in cells with activated c-Myc revealed a redistribution of PDX-1 from the nucleus to the cytoplasm. These results suggest that c-Myc plays a central role in a cell-cell contact-mediated switch mechanism by which cell division vs. differentiation in endocrine cells is determined.