Maintenance of glucose balance in mammals depends on the production of insulin by the β-cells of the pancreas, in response to raised concentrations of blood glucose. In humans suffering from non-insulindependent diabetes (NIDDM), β-cell failure follows chronic resistance to insulin-stimulated glucose uptake and causes the development of hyperglycaemia. NIDDM shows a polygenic inheritance pattern in most cases: defined genetic defects that have little effect on their own, in combination induce diabetes by epistatic interactions. Here we show that mice heterozygous for the gene pdx-1, which encodes a transcription factor for the insulin gene and regulates pancreatic development, have impaired glucose tolerance. This pancreatic nuclear regulatory factor is required for glucose homeostasis even when the pancreas is morphologically normal.