Recently, it has been shown that mutations in the P2 promoter of the hepatocyte nuclear factor (HNF)-4 alpha gene (HNF4A) cause maturity-onset diabetes of the young (MODY), while single nucleotide polymorphisms in this locus are associated with type 2 diabetes. In this study, we examined 1,189 bp of the P2 promoter and the associated exon 1D of HNF4A for variations associated with diabetes in 114 patients with type 2 diabetes, 72 MODYX probands, and 85 women with previous gestational diabetes mellitus. A -192c/g mutation was found in five patients. We screened 1,587 diabetic subjects and 4,812 glucose-tolerant subjects for the -192c/g mutation and identified 5 diabetic and 1 glucose-tolerant mutation carriers (P=0.004). Examination of the families showed that carriers of the -192c/g mutation had a significantly impaired glucose-stimulated insulin release and lower levels of serum total cholesterol compared with matched control subjects. Furthermore, the mutation disrupted the binding of an unidentified sequence-specific DNA binding complex present in human islet extracts. Also, two novel linked polymorphisms in the P2 promoter at positions -1107g/t and -858c/t were identified. These variants were not significantly associated with type 2 diabetes or any pre-diabetic traits. In conclusion, a rare, novel mutation that disrupts a protein binding site in the pancreatic HNF4A promoter associates with late-onset diabetes.