Cell fate specification depends on transcriptional activation driven by lineage-specific transcription factors as well as changes in chromatin organization. To date, the interplay between transcription factors and chromatin modifiers during development is not well understood. We focus here on the initiation of the pancreatic program from multipotent endodermal progenitors. Transcription factors that play key roles in regulating pancreatic progenitor state have been identified, but the chromatin regulators that help to establish and maintain pancreatic fate are less well known. Using a comparative approach, we identify a crucial role for the histone methyltransferase Setd7 in establishing pancreatic cell identity. We show that Setd7 is expressed in the prospective pancreatic endoderm of Xenopus and mouse embryos prior to Pdx1 induction. Importantly, we demonstrate that setd7 is sufficient and required for pancreatic cell fate specification in Xenopus. Functional and biochemical approaches in Xenopus and mouse endoderm support that Setd7 modulates methylation marks at pancreatic regulatory regions, possibly through interaction with the transcription factor Foxa2. Together, these results demonstrate that Setd7 acts as a central component of the transcription complex initiating the pancreatic program.