HNF4α (hepatocyte nuclear factor 4α) is a culprit gene product for a monogenic and dominantly inherited form of diabetes, referred to as MODY (maturity onset diabetes of the young). As a member of the NR (nuclear receptor) superfamily, HNF4α recruits transcriptional co-activators such as SRC-1α (steroid receptor co-activator-1α) and PGC-1α (peroxisome-proliferator-activated receptor γ co-activator-1α) through the LXXLL-binding motifs for its transactivation, and our recent crystal structures of the complex provided the molecular details and the mechanistic insights into these co-activator recruitments. Several mutations have been identified from the MODY patients and, among these, point mutations can be very instructive site-specific measures of protein function and structure. Thus, in the present study, we probed the functional effects of the two MODY point mutations (D206Y and M364R) found directly near the LXXLL motif-binding site by conducting a series of experiments on their structural integrity and specific functional roles such as overall transcription, ligand selectivity, target gene recognition and co-activator recruitment. While the D206Y mutation has a subtle effect, the M364R mutation significantly impaired the overall transactivation by HNF4α. These functional disruptions are mainly due to their reduced ability to recruit co-activators and lowered protein stability (only with M364R mutation), while their DNA-binding activities and ligand selectivities are preserved. These results confirmed our structural predictions and proved that MODY mutations are loss-of-function mutations leading to impaired β-cell function. These findings should help target selective residues for correcting mutational defects or modulating the overall activity of HNF4α as a means of therapeutic intervention.