Mutations in the HNF4alpha gene have been correlated with maturity-onset diabetes of the young, which is characterized mainly by pancreatic beta-cell dysfunction and is also associated with mild liver abnormalities. HNF4alpha D126Y and D126H mutations were found in a patient with early-onset type 2 diabetes, and the R324H mutation was found in a common type 2 diabetic nephropathic patient. We investigated whether these mutations, which have not yet been functionally characterized, impair HNF4alpha function in three cell models: HEK 293 embryonal kidney cells, HepG2 hepatoma cells, and betaTC3 pancreatic beta-cells. The R324H mutation had no effect on HNF4alpha function with either the HNF1alpha and L-type pyruvate kinase (LPK) promoters, but the D126Y and D126H mutations impaired HNF4alpha transcriptional activities in all tested cell lines. These impairments by D126Y and D126H mutations, which are located in the T box, are not due to a loss of dimerization but to a loss of DNA binding. Interestingly, the strongest functional consequences of these mutations were observed on the HNF1alpha promoter in betaTC3 cells. Given the key role of the transcription factor HNF1alpha in pancreatic beta-cell function, it can be inferred that impairment of HNF4alpha function by these mutations affects metabolic pathways in pancreatic beta-cells and contributes to development of diabetes. Moreover, the HNF4alpha-mediated activation of the apolipoprotein CIII promoter in HepG2 cells was significantly impaired by D126Y and D126H mutations. These results support clinical findings that liver function can also be impaired in diabetic patients having HNF4alpha mutations.