Isl1 is a LIM homeobox transcription factor showing conserved expression in the developing and mature vertebrate pancreas. So far, functions of pancreatic Isl1 have mainly been studied in the mouse, where Isl1 has independent functions during formation of exocrine and endocrine tissues. Here, we take advantage of a recently described isl1 mutation in zebrafish to address pancreatic isl1 functions in a non-mammalian system. Isl1 in zebrafish, as in mouse, shows transient expression in mesenchyme flanking the pancreatic endoderm, and continuous expression in all endocrine cells. In isl1 mutants, endocrine cells are specified in normal numbers but more than half of these cells fail to establish expression of endocrine hormones. By using a lineage tracking approach that highlights cells leaving cell cycle early in development, we show that isl1 functions are different in first and second wave endocrine cells. In isl1 mutants, early forming first wave cells show virtually no glucagon expression and a reduced number of cells expressing insulin and somatostatin, while in the later born second wave cells somatostatin expressing cells are strongly reduced and insulin and glucagon positive cells form in normal numbers. Isl1 mutant zebrafish also display a smaller exocrine pancreas. We find that isl1 expression in the pancreatic mesenchyme overlaps with that of the related genes isl2a and isl2b and that pancreatic expression of isl-genes is independent of each other. As a combined block of two or three isl1/2 genes results in a dose-dependent reduction of exocrine tissue, our data suggest that all three genes cooperatively contribute to non-cell autonomous exocrine pancreas extension. The normal expression of the pancreas mesenchyme markers meis3, fgf10 and fgf24 in isl1/2 depleted embryos suggests that this activity is independent of isl-gene function in pancreatic mesenchyme formation as was found in mouse. This indicates species-specific differences in the requirement for isl-genes in pancreatic mesenchyme formation. Overall, our data reveal a novel interaction of isl1 and isl2 genes in exocrine pancreas expansion and cell type specific requirements during endocrine cell maturation.