The Onecut homeodomain transcription factor hepatic nuclear factor 6 (Hnf6) is necessary for proper development of islet beta-cells. Hnf6 is initially expressed throughout the pancreatic epithelium but is downregulated in endocrine cells at late gestation and is not expressed in postnatal islets. Transgenic mice in which Hnf6 expression is maintained in postnatal islets (pdx1(PB)Hnf6) show overt diabetes and impaired glucose-stimulated insulin secretion (GSIS) at weaning. We now define the mechanism whereby maintenance of Hnf6 expression postnatally leads to beta-cell dysfunction. We provide evidence that continued expression of Hnf6 impairs GSIS by altering insulin granule biosynthesis, resulting in a reduced response to secretagogues. Sustained expression of Hnf6 also results in downregulation of the beta-cell-specific transcription factor MafA and a decrease in total pancreatic insulin. These results suggest that downregulation of Hnf6 expression in beta-cells during development is essential to achieve a mature, glucose-responsive beta-cell.