To develop methods for the generation of insulin-producing beta-cells for the treatment of diabetes, we have used GFP-tagged embryonic stem cells (ESCs) to elucidate the process of pancreas development. Using the reporter Pdx1(GFP/w) ESC line, we have previously described a serum-free differentiation protocol in which Pdx1-GFP(+) cells formed GFP bright (GFP(br)) epithelial buds that resembled those present in the developing mouse pancreas. In this study we extend these findings to demonstrate that these cells can undergo a process of branching morphogenesis, similar to that seen during pancreatic development of the mid-gestation embryo. These partially disaggregated embryoid bodies containing GFP(br) buds initially form epithelial ring-like structures when cultured in Matrigel. After several days in culture, these rings undergo a process of proliferation and form a ramified network of epithelial branches. Comparative analysis of explanted dissociated pancreatic buds from E13.5 Pdx1(GFP/w) embryos and ESC-derived GFP(br) buds reveal a similar process of proliferation and branching, with both embryonic Pdx1(GFP/w) branching pancreatic epithelium and ESC-derived GFP(br) branching organoids expressing markers representing epithelial (EpCAM and E-Cadherin), ductal (Mucin1), exocrine (Amylase and Carboxypeptidase 1A), and endocrine cell types (Glucagon and Somatostatin). ESC-derived branching structures also expressed a suite of genes indicative of ongoing pancreatic differentiation, paralleling gene expression within similar structures derived from the E13.5 fetal pancreas. In summary, differentiating mouse ESCs can generate pancreatic material that has significant similarity to the fetal pancreatic anlagen, providing an in vitro platform for investigating the cellular and molecular mechanisms underpinning pancreatic development.