Limitations in cell proliferation are a key barrier to reprogramming differentiated cells to pluripotent stem cells, and conversely, acquiring these limitations may be important to establish the differentiated state. The pancreas, and beta cells in particular have a low proliferative potential, which limits regeneration, but how these limitations are established is largely unknown.Understanding proliferation potential is important for the safty of cell replacement therapy with 2 cell products made from pluripotent stem cell which have unlimited proliferative potential. Here we test a novel hypothesis, that these limitations are established through limitations in S-phase progression. We used a stem cell-based system to expose differentiating stem cells to small molecules that interfere with cell cycle progression either by inducing G1 arrest, impairing Sphase entry, or S-phase completion. Upon release from these molecules, we determined growth potential, differentiation and function of insulin-producing endocrine cells both in vitro and after grafting in vivo. We found that the combination of G1 arrest with a compromised ability to complete DNA replication promoted the differentiation of pancreatic progenitor cells towards insulin-producing cells, improved the stability of the differentiated state, and protected mice from diabetes without the formation of cystic growths. Therefore, a compromised ability to enter S-phase and replicate the genome is a functionally important property of pancreatic endocrine differentiation, and can be exploited to generate insulin-producing organoids with predictable growth potential after transplantation.