Neonatal diabetes mellitus (NDM) is a rare form of diabetes diagnosed within the first 6 months of life. Genetic studies have allowed the identification of several genes linked to the development of NDM; however, genetic causes for ∼20% of the cases remain to be clarified. Most cases of NDM involve isolated diabetes, but sometimes NDM appears in association with other pathological conditions, including autoimmune diseases. Recent reports have linked activating mutations in with early-onset autoimmune disorders that include diabetes of autoimmune origin, but the functional impact of-activating mutations have not been characterized at the pancreatic β-cell level. By using whole-exome sequencing, we identified a novel missense mutation in the binding domain of the STAT3 protein in a patient with NDM. The functional analyses showed that the mutation results in an aberrant activation of STAT3, leading to deleterious downstream effects in pancreatic β-cells. The identified mutation leads to hyperinhibition of the transcription factor Isl-1 and, consequently, to a decrease in insulin expression. These findings represent the first functional indication of a direct link between an NDM-linked activating mutation in and pancreatic β-cell dysfunction.