Developmental progression depends on temporally defined changes in gene expression mediated by transient exposure of lineage intermediates to signals in the progenitor niche. To determine whether cell-intrinsic epigenetic mechanisms contribute to signal-induced transcriptional responses, here we manipulate the signalling environment and activity of the histone demethylase LSD1 during differentiation of hESC-gut tube intermediates into pancreatic endocrine cells. We identify a transient requirement for LSD1 in endocrine cell differentiation spanning a short time-window early in pancreas development, a phenotype we reproduced in mice. Examination of enhancer and transcriptome landscapes revealed that LSD1 silences transiently active retinoic acid (RA)-induced enhancers and their target genes. Furthermore, prolonged RA exposure phenocopies LSD1 inhibition, suggesting that LSD1 regulates endocrine cell differentiation by limiting the duration of RA signalling. Our findings identify LSD1-mediated enhancer silencing as a cell-intrinsic epigenetic feedback mechanism by which the duration of the transcriptional response to a developmental signal is limited.

Genetic variants associated with type 2 diabetes (T2D) risk affect gene regulation in metabolically relevant tissues, such as pancreatic islets. Here, we investigated contributions of regulatory programs active during pancreatic development to T2D risk. Generation of chromatin maps from developmental precursors throughout pancreatic differentiation of human embryonic stem cells (hESCs) identifies enrichment of T2D variants in pancreatic progenitor-specific stretch enhancers that are not active in islets. Genes associated with progenitor-specific stretch enhancers are predicted to regulate developmental processes, most notably tissue morphogenesis. Through gene editing in hESCs, we demonstrate that progenitor-specific enhancers harboring T2D-associated variants regulate cell polarity genes LAMA1 and CRB2. Knockdown of lama1 or crb2 in zebrafish embryos causes a defect in pancreas morphogenesis and impairs islet cell development. Together, our findings reveal that a subset of T2D risk variants specifically affects pancreatic developmental programs, suggesting that dysregulation of developmental processes can predispose to T2D.