Genes involved in distinct diabetes types suggest shared disease mechanisms. Here we show that One Cut Homeobox 1 (ONECUT1) mutations cause monogenic recessive syndromic diabetes in two unrelated patients, characterized by intrauterine growth retardation, pancreas hypoplasia and gallbladder agenesis/hypoplasia, and early-onset diabetes in heterozygous relatives. Heterozygous carriers of rare coding variants of ONECUT1 define a distinctive subgroup of diabetic patients with early-onset, nonautoimmune diabetes, who respond well to diabetes treatment. In addition, common regulatory ONECUT1 variants are associated with multifactorial type 2 diabetes. Directed differentiation of human pluripotent stem cells revealed that loss of ONECUT1 impairs pancreatic progenitor formation and a subsequent endocrine program. Loss of ONECUT1 altered transcription factor binding and enhancer activity and NKX2.2/NKX6.1 expression in pancreatic progenitor cells. Collectively, we demonstrate that ONECUT1 controls a transcriptional and epigenetic machinery regulating endocrine development, involved in a spectrum of diabetes, encompassing monogenic (recessive and dominant) as well as multifactorial inheritance. Our findings highlight the broad contribution of ONECUT1 in diabetes pathogenesis, marking an important step toward precision diabetes medicine.