The three-dimensional architecture of the pancreatic islet is integral to beta cell function, but the process of islet formation remains poorly understood due to the difficulties of imaging internal organs with cellular resolution. Within transparent zebrafish larvae, the developing pancreas is relatively superficial and thus amenable to live imaging approaches. We performed in vivo time-lapse and longitudinal imaging studies to follow islet development, visualizing both naturally occurring islet cells and cells arising with an accelerated timecourse following an induction approach. These studies revealed previously unappreciated fine dynamic protrusions projecting between neighboring and distant endocrine cells. Using pharmacological compound and toxin interference approaches, and single-cell analysis of morphology and cell dynamics, we determined that endocrine cell motility is regulated by phosphoinositide 3-kinase (PI3K) and G-protein-coupled receptor (GPCR) signaling. Linking cell dynamics to islet formation, perturbation of protrusion formation disrupted endocrine cell coalescence, and correlated with decreased islet cell differentiation. These studies identified novel cell behaviors contributing to islet morphogenesis, and suggest a model in which dynamic exploratory filopodia establish cell-cell contacts that subsequently promote cell clustering.