The failure to expand functional pancreatic β-cell mass in response to increased metabolic demand is a hallmark of type 2 diabetes. Lineage tracing studies indicate that replication of existing β-cells is the principle mechanism for β-cell expansion in adult mice. Here we demonstrate that the proliferative response of β-cells is dependent on the orphan nuclear receptor hepatocyte nuclear factor-4α (HNF-4α), the gene that is mutated in Maturity-Onset Diabetes of the Young 1 (MODY1). Computational analysis of microarray expression profiles from isolated islets of mice lacking HNF-4α in pancreatic β-cells reveals that HNF-4α regulates selected genes in the β-cell, many of which are involved in proliferation. Using a physiological model of β-cell expansion, we show that HNF-4α is required for β-cell replication and the activation of the Ras/ERK signaling cascade in islets. This phenotype correlates with the down-regulation of suppression of tumorigenicity 5 (ST5) in HNF-4α mutants, which we identify as a novel regulator of ERK phosphorylation in β-cells and a direct transcriptional target of HNF-4α in vivo. Together, these results indicate that HNF-4α is essential for the physiological expansion of adult β-cell mass in response to increased metabolic demand.