OBJECTIVE Pancreatic islets of perinatal mice lacking the transcription factor Rfx3 exhibit a marked reduction in insulin-producing β-cells. The objective of this work was to unravel the cellular and molecular mechanisms underlying this deficiency. RESEARCH DESIGN AND METHODS Immunofluorescence studies and quantitative RT-PCR experiments were used to study the emergence of insulin-positive cells, the expression of transcription factors implicated in the differentiation of β-cells from endocrine progenitors, and the expression of mature β-cell markers during development in Rfx3−/− and pancreas-specific Rfx3-knockout mice. RNA interference experiments were performed to document the consequences of downregulating Rfx3 expression in Min6 β-cells. Quantitative chromatin immunoprecipitation (ChIP), ChIP sequencing, and bandshift experiments were used to identify Rfx3 target genes. RESULTS Reduced development of insulin-positive cells in Rfx3−/− mice was not due to deficiencies in endocrine progenitors or β-lineage specification, but reflected the accumulation of insulin-positive β-cell precursors and defective β-cells exhibiting reduced insulin, Glut-2, and Gck expression. Similar incompletely differentiated β-cells developed in pancreas-specific Rfx3-deficient embryos. Defective β-cells lacking Glut-2 and Gck expression dominate in Rfx3-deficent adults, leading to glucose intolerance. Attenuated Glut-2 and glucokinase expression, and impaired glucose-stimulated insulin secretion, were also induced by RNA interference–mediated inhibition of Rfx3 expression in Min6 cells. Finally, Rfx3 was found to bind in Min6 cells and human islets to two well-known regulatory sequences, Pal-1 and Pal-2, in the neuroendocrine promoter of the glucokinase gene. CONCLUSIONS Our results show that Rfx3 is required for the differentiation and function of mature β-cells and regulates the β-cell promoter of the glucokinase gene.