Hepatocyte nuclear factor (HNF)-1α and HNF-1β are transcription factors that regulate many target genes in various tissues including liver, pancreas and kidney. Heterozygous mutations in the HNF-1α and HNF-1β genes result in maturity-onset diabetes of the young (MODY)3 and MODY5, respectively. The discovery of these ‘hepatocyte nuclear factors’ as MODY-responsible genes provided a breakthrough in the field of diabetes. Patients with HNF-1α and HNF-1β mutations, as well as their model mice, show impaired pancreatic β-cell function. The mechanism of impaired β-cell function and the target genes has been intensively investigated by considerable in vitro and in vivo studies. The insulin gene is one of the target genes of HNF-1α and HNF-1β in the β-cells, and may contribute to the diabetes. The IGF-1 gene is also regulated by HNF-1α and HNF-1β, and its decreased expression may contribute to growth failure and impaired β-cell proliferation. Mutations in HNF-1β result in symptoms in multiple organs, including kidney and liver, and several target genes have been reported to be involved in the pathogenesis. HNF-1α and HNF-1β may be one of the master regulators of hepatocyte and islet transcription, and further investigations by microarray and genome-scale analyses are providing information for the better understanding of the complex transcriptional network involving HNF-1α and -1β.