Aldehyde dehydrogenase (ALDH) genes are increasingly associated with stem/progenitor cell status but their role in the maintenance of pluripotency remains uncertain. In a screen conducted for downstream Ngn3 target genes using ES derived pancreas progenitors we identified Aldh1b1, encoding a mitochondrial enzyme, as one of the genes strongly up regulated in response to Ngn3 expression. We found both by in situ hybridization and immunofluorescence using a specific antibody that ALDH1B1 is exclusively expressed in the emerging pancreatic buds of the early embryo (9.5 dpc) in a Pdx1 dependent manner. Around the time of secondary transition, ALDH1B1 expression was restricted in the tip tripotent progenitors of the branching epithelium and in a subset of the trunk epithelium. Expression in the latter was Ngn3 dependent. Subsequently, ALDH1B1 expression persisted only in the tip cells that become restricted to the exocrine lineage and declined rapidly as these cells mature. In the adult pancreas we identified rare ALDH1B1⁺ cells that become abundant following pancreas injury in either the caerulein or streptozotocin paradigms. Blocking ALDH catalytic activity in pancreas embryonic explants resulted in reduced size of the explants and accelerated differentiation suggesting for the first time that ALDH activity may be necessary in the developing pancreas for the maintenance and expansion of progenitor pools.