RB is a key substrate of Cdks and an important regulator of the mammalian cell cycle. RB either represses E2Fs that promote cell proliferation or enhances the activity of cell‐specific factors that promote differentiation, although the mechanism that facilitates this dual interaction is unclear. Here, we demonstrate that RB associates with and stabilizes pancreatic duodenal homeobox‐1 (Pdx‐1) that is essential for embryonic pancreas development and adult β‐cell function. Interestingly, Pdx‐1 utilizes a conserved RB‐interaction motif (RIM) that is also present in E2Fs. Point mutations within the RIM reduce RB–Pdx‐1 complex formation, destabilize Pdx‐1 and promote its proteasomal degradation. Glucose regulates RB and Pdx‐1 levels, RB/Pdx‐1 complex formation and Pdx‐1 degradation. RB occupies the promoters of β‐cell‐specific genes, and knockdown of RB results in reduced expression of Pdx‐1 and its target genes. Further, RB‐deficiency in vivo results in reduced pancreas size due to decreased proliferation of Pdx‐1⁺ pancreatic progenitors, increased apoptosis and aberrant expression of regulators of pancreatic development. These results demonstrate an unanticipated regulatory mechanism for pancreatic development and β‐cell function, which involves RB‐mediated stabilization of the pancreas‐specific transcription factor Pdx‐1.