Organ formation is achieved through the complex interplay between signaling pathways and transcriptional cascades. The canonical Wnt signaling pathway plays multiple roles during embryonic development including patterning, proliferation and differentiation in distinct tissues. Previous studies have established the importance of this pathway at multiple stages of pancreas formation as well as in postnatal organ function and homeostasis. In mice, gain-of-function experiments have demonstrated that activation of the canonical Wnt pathway results in pancreatic hypoplasia, a phenomenon whose underlying mechanisms remains to be elucidated. Here, we show that ectopic activation of epithelial canonical Wnt signaling causes aberrant induction of gastric and intestinal markers both in the pancreatic epithelium and mesenchyme, leading to the development of gut-like features. Furthermore, we provide evidence that β -catenin-induced impairment of pancreas formation depends on Hedgehog signaling. Together, our data emphasize the developmental plasticity of pancreatic progenitors and further underscore the key role of precise regulation of signaling pathways to maintain appropriate organ boundaries.