Aims/hypothesis. The aim of this study was to examine the putative role of mutations in the insulin promoter 1 (IPF1) gene in early-onset diabetes. Methods. We carried out mutation screening of the IPF1 gene in 115 Scandinavian families with at least two members with onset of diabetes younger than 40 years. The allele frequencies were also tested in 183 unrelated patients with late-onset Type II (non-insulin-dependent) diabetes mellitus and in 92 non-diabetic control subjects. Results. Two novel IPF1 variants (G212R and P239Q) and one previously reported (D76N) IPF1 variant were identified in the 115 families (3.5 %). The D76N variant was found in one MODY3 family (S315fsinsA of HNF1α) and also in two families with late-onset Type II diabetes. The P239Q variant was identified in two families with early-onset diabetes including one with MODY3 (R272C of HNF 1α) and in three families with late-onset Type II diabetes. Despite the fact that the variants did not segregate completely with diabetes, the non-diabetic carriers of the IPF1 variants had increased blood glucose concentrations (p < 0.05) and reduced insulin:glucose ratios (p < 0.05) during an oral glucose tolerance test compared with non-diabetic family members without these variants. In addition, when the G212R and P239Q variants were expressed in cells without IPF1 i. e. . Nes2 y cells, both variants showed about a 50 % reduction in their ability to activate insulin gene transcription compared to wild-type IPF1, as measured by reporter gene assay. Conclusion/interpretation. Although mutations in the IPF-1 gene are rare in early- (3.5 %) and late-onset (2.7 %) Type II diabetes, they are functionally important and occur also in families with other MODY mutations. [Diabetologia (2001) 44: 249–258]