Pax4 is a key transcription factor that regulates pancreas development and β-cell differentiation. It has been reported that PAX4 amino acid variants, Arg192His (R192H) and Arg192Ser (R192S), were associated with increased risk of type2 diabetes (T2D) in Korean. This study aims to unveil the mechanism underlying PAX4 R192H variant-related T2D phenotypes. For human studies, we analyzed 4,610 participants without T2D at baseline from Ansung-Ansan Cohort with oral glucose tolerant tests taken biennially for 14 years. Animal model of human PAX4 R192H variant was generated by knock-in of point mutation in Pax4 gene locus. PAX4WT/WT (PAX4 WT) and PAX4R192H/R192H (PAX4 R192H) mice were fed either standard chow diet (SCD) or high-fat diet (HFD) and the phenotypes were determined by metabolic and histological analyses. Single-cell RNA-sequencing (scRNA-seq) was performed using isolated mouse pancreatic islets. Carriers of PAX4 variants showed a faster decline of disposition index compared to non-carriers, which was driven by a significant difference in the trajectory of the insulinogenic index but not the insulin sensitivity index. PAX4 R192H mice also showed early impairment of both glucose tolerance and glucose-stimulated insulin secretion compared to PAX4 WT mice during the period of HFD feeding, while HFD-induced β-cell proliferation was delayed in PAX4 R192H mice. Islet scRNA-seq data further revealed aberrant upregulation of ER-stress response genes and concomitant downregulation of genes governing β-cell function in β-cells of PAX4 R192H mice after 4 weeks of HFD feeding, indicating altered response of β-cell to metabolic stress. People who have PAX4 amino acid variants exhibited early impairment of β-cell functions before onset of diabetes. Mice with PAX4 R192H variant showed aberrant response of β-cell to HFD-induced metabolic stress. These findings suggest that the susceptibility of PAX4 R192H variant to T2D could be attributed to the early loss of β-cell function in response to metabolic stress.