Variants in hepatocyte nuclear factor 4A (HNF4A) cause maturity onset diabetes of the young (MODY 1). The objective of the study was to screen the coding and the promoter regions of HNF4A mutations in 87 unrelated South Indian subjects with clinically diagnosed MODY with severe forms of diabetes referred to a tertiary diabetes centre. In addition, we looked at the association of common polymorphisms in HNF4 A gene in subjects with MODY (n = 199), early onset type 2 diabetes (T2DM) (n = 505), late onset T2DM (n = 287) and normal glucose tolerance (NGT) (n = 247). We identified three novel mutations in the P2 promoter region of HNF4A, namely -1009 G/C, -129 T/C and -79 C/T. Co-segregation with diabetes was noted with the -1009 G/C and -129 T/C in one MODY family. We also studied eight single nucleotide polymorphisms (SNPs) of HNF4A gene. The frequency of the minor allele of the rs2144908 was significantly higher in subjects with MODY (p < 0.01) and that of rs736823 was significantly higher in early onset T2DM (p = 0.001). Minor allele frequency of rs1884614 and rs2071197 was significantly lower in early onset T2DM when compared to NGT subjects (p < 0.01). Minor allele frequency of Val255Met was significantly lower in MODY, early onset T2DM and late onset T2DM compared to NGT subjects (p < 0.01). This is the first report of MODY 1 mutations from India and shows that 3.4% of clinically diagnosed MODY subjects have MODY 1. In addition, we report SNPs of HNF4A that are both susceptible to, and protective against, MODY and early onset T2DM.