Mutations in PCBD1 are causative for transient neonatal hyperphenylalaninemia and primapterinuria (HPABH4D). Until now, HPABH4D has been regarded as a transient and benign neonatal syndrome without complications in adulthood. In our study of three adult patients with homozygous mutations in the PCBD1 gene, two patients were diagnosed with hypomagnesemia and renal Mg(2+) loss, and two patients developed diabetes with characteristics of maturity onset diabetes of the young (MODY), regardless of serum Mg(2+) levels. Our results suggest that these clinical findings are related to the function of PCBD1 as a dimerization cofactor for the transcription factor HNF1B. Mutations in the HNF1B gene have been shown to cause renal malformations, hypomagnesemia, and MODY. Gene expression studies combined with immunohistochemical analysis in the kidney showed that Pcbd1 is expressed in the distal convoluted tubule (DCT), where Pcbd1 transcript levels are upregulated by a low Mg(2+)-containing diet. Overexpression in a human kidney cell line showed that wild-type PCBD1 binds HNF1B to costimulate the FXYD2 promoter, the activity of which is instrumental in Mg(2+) reabsorption in the DCT. Of seven PCBD1 mutations previously reported in HPABH4D patients, five mutations caused proteolytic instability, leading to reduced FXYD2 promoter activity. Furthermore, cytosolic localization of PCBD1 increased when coexpressed with HNF1B mutants. Overall, our findings establish PCBD1 as a coactivator of the HNF1B-mediated transcription necessary for fine tuning FXYD2 transcription in the DCT and suggest that patients with HPABH4D should be monitored for previously unrecognized late complications, such as hypomagnesemia and MODY diabetes.