Persistent hyperinsulinaemic hypoglycaemia of infancy (PHHI), or nesidioblastosis, is a rare disorder which may be familial or sporadic, and which is characterized by unregulated secretion of insulin and profound hypoglycaemia in the neonate. The defect has been linked in some patients to mutations in the sulphonyl urea receptor gene (SUR). The present study investigated potential defects in the regulation of the insulin gene by glucose in a beta-cell line (NES 2Y) derived from a patient with PHHI. The results show that the insulin promoter is unresponsive to glucose in PHHI, and that this defect can be attributed to impaired expression of the transcription factor IUF1. Because IUF1 is involved not only in linking glucose metabolism to the control of the insulin, but is also a major regulator of beta-cell differentiation during embryogenesis, we propose that impaired expression of IUF1 contributes to beta-cell dysfunction in PHHI by leading to abnormal beta-cell differentiation.