We have previously identified PAX4 mutations causing MODY9 and a recent genome-wide association study reported a susceptibility locus of type 2 diabetes (T2D) near PAX4. In this study, we aim to investigate the association between PAX4 polymorphisms and T2D in Thai patients and examine functions of PAX4 variant proteins. PAX4 rs2233580 (R192H) and rs712701 (P321H) were genotyped in 746 patients with T2D and 562 healthy normal control subjects by PCR and restriction-fragment length polymorphism method. PAX4 variant proteins were investigated for repressor function on human insulin and glucagon promoters and for cell viability and apoptosis upon high glucose exposure. Genotype and allele frequencies of PAX4 rs2233580 were more frequent in patients with T2D than in control subjects (P=0.001 and 0.0006, respectively) with odds ratio of 1.66 (P=0.001; 95% confidence interval, 1.22-2.27). PAX4 rs712701 was not associated with T2D but it was in linkage disequilibrium with rs2233580. The 192H/321H (A/A) haplotype was more frequent in T2D patients than in controls (9.5% vs 6.6%; P=0.009). PAX4 R192H, but not PAX4 P321H, impaired repression activities on insulin and glucagon promoters and decreased transcript levels of genes required to maintain β-cell function, proliferation and survival. Viability of β-cell was reduced under glucotoxic stress condition for the cells overexpressing either PAX4 R192H or PAX4 P321H or both. Thus these PAX4 polymorphisms may increase T2D risk by defective transcription regulation of target genes and/or decreased β-cell survival in high glucose condition.