We evaluated the effects of E2F1 on glucose homeostasis using E2F1^–/– mice. E2F1^–/– mice show an overall reduction in pancreatic size as the result of impaired postnatal pancreatic growth. Furthermore, these animals have dysfunctional β cells, linked to impaired PDX-1 activity. Because of the disproportionate small pancreas and dysfunctional islets, E2F1^–/– mice secrete insufficient amounts of insulin in response to a glucose load, resulting in glucose intolerance. Despite this glucose intolerance, E2F1^–/– mice do not develop overt diabetes mellitus because they have insulin hypersensitivity, which is secondary to a diminished adipose tissue mass and altered adipocytokine levels, which compensates for the defect in insulin secretion. These data demonstrate that factors controlling cell proliferation, such as E2F1, determine pancreatic growth and function, subsequently affecting metabolic homeostasis.