LKB1 is a key regulator of energy homeostasis through the activation of AMP-activated protein kinase (AMPK) and is functionally linked to vascular development, cell polarity, and tumor suppression. In humans, germ line LKB1 loss-of-function mutations cause Peutz-Jeghers syndrome (PJS), which is characterized by a predisposition to gastrointestinal neoplasms marked by a high risk of pancreatic cancer. To explore the developmental and physiological functions of Lkb1 in vivo, we examined the impact of conditional Lkb1 deletion in the pancreatic epithelium of the mouse. The Lkb1-deficient pancreas, although grossly normal at birth, demonstrates a defective acinar cell polarity, an abnormal cytoskeletal organization, a loss of tight junctions, and an inactivation of the AMPK/MARK/SAD family kinases. Rapid and progressive postnatal acinar cell degeneration and acinar-to-ductal metaplasia occur, culminating in marked pancreatic insufficiency and the development of pancreatic serous cystadenomas, a tumor type associated with PJS. Lkb1 deficiency also impacts the pancreas endocrine compartment, characterized by smaller and scattered islets and transient alterations in glucose control. These genetic studies provide in vivo evidence of a key role for LKB1 in the establishment of epithelial cell polarity that is vital for pancreatic acinar cell function and viability and for the suppression of neoplasia.