Hepatocyte nuclear factor (HNF)-1alpha is a homeodomain-containing transcription factor. Humans heterozygous for mutations in the HNF-1alpha gene develop maturity-onset diabetes of the young (MODY3), which is associated with reduced insulin secretion. The mechanisms responsible for defective glucose-induced insulin secretion due to HNF-1alpha deficiency are complex. In order to explore the relationship between HNF-1alpha and beta-cell proliferation, we have created a novel animal model. Mice lacking one allele of the HNF-1alpha gene were crossed with transgenic mice expressing the large T antigen driven by the rat insulin II promoter (RIP). The resulting mouse strains allowed us to study the effect of HNF-1alpha deficiency on the extensive beta-cell proliferation that occurs in these mice. Our results indicate that deficiency of HNF-1alpha severely constrains the extent of beta-cell proliferation occurring in RIP-Tag mice leading to significant changes in blood glucose concentrations as a result of reduced beta-cell number, insulin content, insulin secretion and intracellular responses in Ca(2+). Furthermore expression profiling studies using immortalized cell lines generated from HNF-1alpha/RIP-Tag mice showed changes in expression of genes involved in cellular growth and proliferation. These results provide insights into the mechanisms whereby HNF-1alpha affects beta-cell function.