The notochord is an evolutionary novelty in vertebrates that functions as an important signaling center during development. Notochord ablation in chicken has demonstrated that it is crucial for pancreas development; however, the molecular mechanism has not been fully described. Here, we show that in zebrafish, the loss of function of nog2, a Bmp antagonist expressed in the notochord, impairs β cell differentiation, compatible with the antagonistic role of Bmp in β cell differentiation. In addition, we show that nog2 expression in the notochord is induced by at least one notochord enhancer and its loss of function reduces the number of pancreatic progenitors and impairs β cell differentiation. Tracing Nog2 diffusion, we show that Nog2 emanates from the notochord to the pancreas progenitor domain. Finally, we find a notochord enhancer in human and mice Nog genomic landscapes, suggesting that the acquisition of a Nog notochord enhancer occurred early in the vertebrate phylogeny and contributes to the development of complex organs like the pancreas.