Type 2 diabetes mellitus is a common disabling disease with onset in middle-aged individuals, caused by an imbalance between insulin production and action. Genetic studies point to major genetic components, but, with the exception of maturity-onset diabetes of the young (MODY), specific diabetes susceptibility genes remain to be identified. Recent studies showed that a dominant negative mutation in the insulin promoter factor-1 (IPF-1), a pancreatic beta-cell specific transcription factor, causes pancreatic agenesis and MODY. Thus, we investigated 192 French, non-MODY type 2 diabetic families for mutations in IPF-1. We identified 3 novel IPF-1 mutations, including 2 substitutions (Q59L and D76N) and an in-frame proline insertion (InsCCG243). Functional transactivation assays of these IPF-1 mutant isoforms in a beta-pancreatic tumor cell line transfected with a transcriptional reporter and IPF-1 expression plasmids demonstrate a significant inhibition of basal insulin promoter activity (stronger with the InsCCG243 mutant). We find that the InsCCG243 mutation is linked, in 2 families, to an autosomal dominant-like late-onset form of type 2 diabetes, in which insulin secretion becomes progressively impaired. The lower penetrance D76N and Q59L mutations were more prevalent and were associated with a relative risk of 12.6 for diabetes and with decreased glucose-stimulated insulin-secretion in nondiabetic subjects. We propose that IPF-1 mutations can cause MODY or apparently monogenic late-onset diabetes and that they represent a significant risk factor for type 2 diabetes in humans.