In contrast to the considerable body of data on pancreas development in rodents, information on pancreas development in humans is scant. We previously described a model in which mature beta cells developed from human embryonic pancreas: human embryonic pancreas was grafted under the kidney capsule of scid mice, beta cells were then seen to develop in the graft. Here, we showed that not only beta cells, but also other endocrine cells, acinar cells and ducts develop in this model. We then used this model to probe the mechanisms underlying acinar and beta cell development in the human embryonic pancreas. BrdU pulse/chase experiments produced evidence of clonal acinar cell development: the first acinar cells to appear proliferated, thereby expanding the acinar cell population. In contrast, beta cell development was regulated by the proliferation of pancreatic progenitor cells, followed by beta‐cell differentiation. We then showed that early progenitors expressing PDX1 proliferated, whereas late endocrine progenitors expressing Ngn3 did not. This proliferative capacity of early endocrine progenitor cells in embryonic human pancreas may hold promise for obtaining human beta‐cell expansion. Developmental Dynamics 234:339–345, 2005. © 2005 Wiley‐Liss, Inc.