Beyond its role as an electron acceptor in aerobic respiration, oxygen is also a key effector of many developmental events. The oxygen-sensing machinery and the very fabric of cell identity and function have been shown to be deeply intertwined. Here we take a first look at how oxygen might lie at the crossroads of at least two of the major molecular pathways that shape pancreatic development. Based on recent evidence and a thorough review of the literature, we present a theoretical model whereby evolving oxygen tensions might choreograph to a large extent the sequence of molecular events resulting in the development of the organ. In particular, we propose that lower oxygenation prior to the expansion of the vasculature may favour HIF (hypoxia inducible factor)-mediated activation of Notch and repression of Wnt/beta-catenin signalling, limiting endocrine cell differentiation. With the development of vasculature and improved oxygen delivery to the developing organ, HIF-mediated support for Notch signalling may decline while the beta-catenin-directed Wnt signalling is favoured, which would support endocrine cell differentiation and perhaps exocrine cell proliferation/differentiation.