To determine the role of the phosphatidylinositol 3-kinase (PI3-K) pathway in pancreas development, we generated a pancreas-specific knockout of Pten, a negative regulator of PI3-K signaling. Knockout mice display progressive replacement of the acinar pancreas with highly proliferative ductal structures that contain abundant mucins and express Pdx1 and Hes1, two markers of pancreatic progenitor cells. Moreover, a fraction of these mice develop ductal malignancy. We provide evidence that ductal metaplasia results from the expansion of centroacinar cells rather than transdifferentiation of acinar cells. These results indicate that Pten actively maintains the balance between different cell types in the adult pancreas and that misregulation of the PI3-K pathway in centroacinar cells may contribute to the initiation of pancreatic carcinoma in vivo.