Heterozygous HNF1A mutations cause pancreatic-islet β-cell dysfunction and monogenic diabetes (MODY3). Hnf1α is known to regulate numerous hepatic genes, yet knowledge of its function in pancreatic islets is more limited. We now show that Hnf1a deficiency in mice leads to highly tissue-specific changes in the expression of genes involved in key functions of both islets and liver. To gain insights into the mechanisms of tissue-specific Hnf1α regulation, we integrated expression studies of Hnf1a-deficient mice with identification of direct Hnf1α targets. We demonstrate that Hnf1α can bind in a tissue-selective manner to genes that are expressed only in liver or islets. We also show that Hnf1α is essential only for the transcription of a minor fraction of its direct-target genes. Even among genes that were expressed in both liver and islets, the subset of targets showing functional dependence on Hnf1α was highly tissue specific. This was partly explained by the compensatory occupancy by the paralog Hnf1β at selected genes in Hnf1a-deficient liver. In keeping with these findings, the biological consequences of Hnf1a deficiency were markedly different in islets and liver. Notably, Hnf1a deficiency led to impaired large-T-antigen-induced growth and oncogenesis in β cells yet enhanced proliferation in hepatocytes. Collectively, these findings show that Hnf1α governs broad, highly tissue-specific genetic programs in pancreatic islets and liver and reveal key consequences of Hnf1a deficiency relevant to the pathophysiology of monogenic diabetes.