Pancreas development relies on a network of transcription factors belonging mainly to the Homeodomain and basic Helix-Loop-Helix families. We show in this study that, in zebrafish, sox4, a member of the SRY-like HMG-box (SOX) family, is required for proper endocrine cell differentiation. We found that two genes orthologous to mammalian Sox4 are present in zebrafish and that only one of them, sox4b, is strongly expressed in the pancreatic anlage. Transcripts of sox4b were detected in mid-trunk endoderm from the 5-somite stage, well before the onset of expression of the early pancreatic gene pdx-1. Furthermore, by fluorescent double in situ hybridization, we found that expression of sox4b is mostly restricted to precursors of the endocrine compartment. This expression is not maintained in differentiated cells although transient expression can be detected in alpha cells and some beta cells. That sox4b-expressing cells belong to the endocrine lineage is further illustrated by their absence from the pancreata of slow-muscle-omitted mutant embryos, which specifically lack all early endocrine markers while retaining expression of exocrine markers. The involvement of sox4b in cell differentiation is suggested firstly by its up-regulation in mind bomb mutant embryos displaying accelerated pancreatic cell differentiation. In addition, sox4b knock-down leads to a drastic reduction in glucagon expression, while other pancreatic markers including insulin, somatostatin, and trypsin are not significantly affected. This disruption of alpha cell differentiation is due to down-regulation of the homeobox arx gene specifically in the pancreas. Taken together, these data demonstrate that, in zebrafish, sox4b is expressed transiently during endocrine cell differentiation and plays a crucial role in the generation of alpha endocrine cells.