The differentiation of murine and human embryonic stem (ES) cells into pancreatic cell types has been shown by several methods including spontaneous differentiation, formation of multi-lineage progenitors, lineage selection or transgene expression. However, these strategies led to a mixture of cells of all three primary germ layers and only a low percentage of definitive endoderm cells giving rise to pancreas, liver, lung and intestine. To reproducibly generate functional insulin-producing cells, ES cells have to be differentiated via definitive endoderm and pancreatic endocrine progenitors recapitulating the in vivo development. Activin A, a member of the transforming growth factor beta superfamily, has been shown to induce definitive endoderm cells dependent on concentration, culture conditions and time of application. Moreover, serum components or contamination by feeder cells as well as differentiation and proliferation factors are critical for successful generation of activin A-induced ES cells into endoderm and pancreatic cells. The review presents an overview on those factors that influence activin A activity on endoderm and endocrine progenitor cells and determines the role of signaling factors in the differentiation process into the pancreatic lineage.