Mutations in the homeobox gene vHnf1 are associated with human diseases MODY5 (maturity-onset diabetes of the young, type V) and familial GCKD (glomerulocystic kidney disease). In an insertional mutagenesis screen in zebrafish, we isolated mutant alleles of vhnf1. Phenotypes of these mutants include formation of kidney cysts, underdevelopment of the pancreas and the liver, and reduction in size of the otic vesicles. We show that these abnormalities arise from patterning defects during development. We further provide evidence that vhnf1 regulates the expression of key patterning genes for these organs. vhnf1 is required for the proper expression of pdx1 and shh (sonic hedgehog) in the gut endoderm, pax2 and wt1 in the pronephric primordial, and valentino (val) in the hindbrain. Complementary to the loss-of-function phenotypes, overexpression of vhnf1 induces expansion of the val expression domain in the hindbrain. We propose that vhnf1 controls development of multiple organs through regulating regional specification of organ primordia. The similarity between vhnf1-associated fish phenotypes and human symptoms suggests a correlation between developmental functions of vhnf1 and the molecular etiology of MODY5 and GCKD.