We have used conditional gene ablation to uncover a dramatic and unpredicted role for the winged-helix transcription factor Foxa2 (formerly HNF-3 beta) in pancreatic beta-cell differentiation and metabolism. Mice that lack Foxa2 specifically in beta cells (Foxa2(loxP/loxP); Ins.Cre mice) are severely hypoglycemic and show dysregulated insulin secretion in response to both glucose and amino acids. This inappropriate hypersecretion of insulin in the face of profound hypoglycemia mimics pathophysiological and molecular aspects of familial hyperinsulinism. We have identified the two subunits of the beta-cell ATP-sensitive K(+) channel (K(ATP)), the most frequently mutated genes linked to familial hyperinsulinism, as novel Foxa2 targets in islets. The Foxa2(loxP/loxP); Ins.Cre mice will serve as a unique model to investigate the regulation of insulin secretion by the beta cell and suggest the human FOXA2 as a candidate gene for familial hyperinsulinism.