Mutations in the homeodomain-containing transcription factor hepatocyte nuclear factor (HNF)-1β are the cause of one form of maturity-onset diabetes of the young (MODY), type 5 (MODY5). We have studied a Norwegian family, N5, with a syndrome of mild diabetes, progressive non-diabetic renal disease and severe genital malformations. The sequence of the HNF-1β gene ( TCF2 ) revealed a 75 bp deletion in exon 2 (409–483del) which would result in the synthesis of a protein lacking amino acids Arg137 to Lys161 (R137-K161del). This deletion is located in the pseudo-POU region of HNF-1β, a region implicated in the specificity of DNA binding. Functional studies of R137-K161del HNF-1β revealed that it could not bind an HNF-1 target sequence or stimulate transcription of a reporter gene indicating that this is a loss-of-function mutation. The R137-K161del allele co-segregated with diabetes and renal disease in pedigree N5. In addition, two of four female carriers with this mutation had vaginal aplasia and rudimentary uterus (Müllerian aplasia). These studies strongly suggest that heterozygous mutations in the HNF-1β gene are associated with a syndrome characterized by MODY and severe, non-diabetic renal disease. Moreover, the presence of internal genital malformations in two females suggests that additional clinical features may be associated with HNF-1β mutations.