Fibroblast growth factors (FGFs) and their receptors (FGFRs) are key signaling molecules for pancreas development. Although FGFR3 is a crucial developmental gene, acting as a negative regulator of bone formation, its participation remains unexplored in pancreatic organogenesis. We found that FGFR3 was expressed in the epithelia in both mouse embryonic and adult regenerating pancreata but was absent in normal adult islets. In FGFR3 knockout mice, we observed an increase in the proliferation of epithelial cells in neonates, leading to a marked increase in islet areas in adults. In vitro studies showed that FGF9 is a very potent ligand for FGFR3 and activates extracellular signal-related kinases (ERKs) in pancreatic cell lines. Moreover, FGFR3 blockade or FGFR3 deficiency led to increased proliferation of pancreatic epithelial cells in vivo. This was accompanied by an increase in the proportion of potential islet progenitor cells. Thus, our results show that FGFR3 signaling inhibits the expansion of the immature pancreatic epithelium. Consequently, this study suggests that FGFR3 participates in regulating pancreatic growth during the emergence of mature islet cells.