Fgf10 is a critical component of mesenchymal-to-epithelial signaling during endodermal development. In the Fgf10 null pancreas, the embryonic progenitor population fails to expand, while ectopic Fgf10 expression forces progenitor arrest and organ hyperplasia. Using a conditional Fgf10 gain-of-function model, we observed that the timing of Fgf10 expression affected the cellular competence of the arrested pancreatic progenitors. We present evidence that the Fgf10-arrested progenitor state is reversible and that terminal differentiation resumes upon cessation of Fgf10 production. However, competence towards the individual pancreatic cell lineages depended upon the gestational time of when Fgf10 expression was attenuated. This revealed a competence window of endocrine and ductal cell formation that coincided with the pancreatic secondary transition between E13.5 and E15.5. We demonstrate that maintaining the Fgf10-arrested state during this period leads to permanent loss of competence for the endocrine and ductal cell fates. However, competence of the arrested progenitors towards the exocrine cell fate was retained throughout the secondary transition. Sustained Fgf10 expression caused irreversible loss of Ngn3 expression, which may underlie the loss of endocrine competence. Maintenance of exocrine competence may be attributable to continuous Ptf1a expression in the Fgf10-arrested progenitors. This may explain the rapid induction of Bhlhb8, a normally distalized cell intrinsic marker, following loss of ectopic Fgf10 expression. We conclude that the window for endocrine and ductal cell competence ceases during the secondary transition in pancreatic development.