Gene discovery studies in individuals with diabetes diagnosed within 6 months of life (neonatal diabetes, NDM) can provide unique insights into the development and function of human pancreatic beta-cells. We describe the identification of homozygous PAX4 loss-of-function variants in 2 unrelated individuals with NDM: a p.(Arg126*) stop-gain variant and a c.-352_104del deletion affecting the first 4 PAX4 exons. We confirmed the p.(Arg126*) variant causes nonsense mediated decay in CRISPR-edited human induced pluripotent stem cell (iPSC)-derived pancreatic endoderm cells. Integrated analysis of CUT&RUN and RNA-sequencing in PAX4-depleted islet cell models identified genes directly regulated by PAX4 involved in both pancreatic islet development and glucose-stimulated insulin secretion. Both probands had transient NDM which remitted in early infancy but relapsed between the ages of 2 and 7 years, demonstrating that in contrast to mouse models, PAX4 is not essential for the development of human pancreatic beta-cells.