Unique nuclear receptor Hepatocyte Nuclear Factor 4α (HNF4α) is an essential transcriptional regulator for early development and proper function of pancreatic ß-cells, and its mutations are monogenic causes of a dominant inherited form of diabetes referred to as Maturity Onset Diabetes of the Young 1 (MODY1). As a gene-specific transcription factor, HNF4α exerts its function through various molecular interactions, but its protein recruiting network has not been fully characterized. Here we report the identification of MED25 as one of the HNF4α binding partners in pancreatic ß-cells leading to insulin secretion which is impaired in MODY patients. MED25 is one of the subunits of the Mediator complex that is required for induction of RNA polymerase II transcription by various transcription factors including nuclear receptors. This HNF4α-MED25 interaction was initially identified by a yeast-two-hybrid method, confirmed by in vivo and in vitro analyses, and proven to be mediated through the MED25-LXXLL motif in a ligand-independent manner. Reporter-gene based transcription assays and siRNA/shRNA-based gene silencing approaches revealed that this interaction is crucial for full activation of HNF4α-mediated transcription, especially expression of target genes implicated in glucose-stimulated insulin secretion. Selected MODY mutations at the LXXLL motif binding pocket disrupt these interactions and cause impaired insulin secretion through a 'loss-of-function' mechanism.