Epithelial-mesenchymal interactions are crucial for the proper development of many organs, including the pancreas. Within the pancreas, the ducts are thought to harbor stem/progenitor cells, and possibly to give rise to pancreatic ductal carcinoma. Little is known about the mechanism of formation of pancreatic ducts in the embryo. Pancreatic mesenchyme contains numerous soluble factors which help to sustain the growth and differentiation of exocrine and endocrine structures. Here, we report that one such morphoregulatory mesenchymal protein, epimorphin, plays an important role during pancreatic ductal proliferation and differentiation. We found that epimorphin is expressed in pancreatic mesenchyme during early stages of development, and at mesenchymal-epithelial interfaces surrounding the ducts at later stages. Strong upregulation of epimorphin expression was seen during in vitro pancreatic duct differentiation. Similarly, in vitro pancreatic duct formation was inhibited by a neutralizing antibody against epimorphin, whereas addition of recombinant epimorphin partially rescued duct formation. Together, our study demonstrates the role of epimorphin in pancreatic ductal morphogenesis.