In 404 Lep(ob/ob) F2 progeny of a C57BL/6J (B6) x DBA/2J (DBA) intercross, we mapped a DBA-related quantitative trait locus (QTL) to distal Chr1 at 169.6 Mb, centered about D1Mit110, for diabetes-related phenotypes that included blood glucose, HbA1c, and pancreatic islet histology. The interval was refined to 1.8 Mb in a series of B6.DBA congenic/subcongenic lines also segregating for Lep(ob). The phenotypes of B6.DBA congenic mice include reduced beta-cell replication rates accompanied by reduced beta-cell mass, reduced insulin/glucose ratio in blood, reduced glucose tolerance, and persistent mild hypoinsulinemic hyperglycemia. Nucleotide sequence and expression analysis of 14 genes in this interval identified a predicted gene that we have designated “Lisch-like” (Ll) as the most likely candidate. The gene spans 62.7 kb on Chr1qH2.3, encoding a 10-exon, 646-amino acid polypeptide, homologous to Lsr on Chr7qB1 and to Ildr1 on Chr16qB3. The largest isoform of Ll is predicted to be a transmembrane molecule with an immunoglobulin-like extracellular domain and a serine/threonine-rich intracellular domain that contains a 14-3-3 binding domain. Morpholino knockdown of the zebrafish paralog of Ll resulted in a generalized delay in endodermal development in the gut region and dispersion of insulin-positive cells. Mice segregating for an ENU-induced null allele of Ll have phenotypes comparable to the B.D congenic lines. The human ortholog, C1orf32, is in the middle of a 30-Mb region of Chr1q23-25 that has been repeatedly associated with type 2 diabetes.