Maturity-onset diabetes of the young type 5 (MODY5) is due to heterozygous mutations or deletion of HNF1B. No mouse models are currently available to recapitulate the human MODY5 disease. Here, we investigate the pancreatic phenotype of a unique MODY5 mouse model generated by heterozygous insertion of a human HNF1B splicing mutation at the intron-2 splice donor site in the mouse genome. This Hnf1bsp2/+ model generated with targeted mutation of Hnf1b mimicking the c.544+1G>T (<IVS2nt+1G>T) mutation identified in humans, results in alternative transcripts and a 38% decrease of native Hnf1b transcript levels. As a clinical feature of MODY5 patients, the hypomorphic mouse model Hnf1bsp2/+ displays glucose intolerance. Whereas Hnf1bsp2/+ isolated islets showed no altered insulin secretion, we found a 65% decrease in pancreatic insulin content associated with a 30% decrease in total large islet volume and a 20% decrease in total β-cell volume. These defects were associated with a 30% decrease in expression of the pro-endocrine gene Neurog3 that we previously identified as a direct target of Hnf1b, showing a developmental etiology. As another clinical feature of MODY5 patients, the Hnf1bsp2/+ pancreases display exocrine dysfunction with hypoplasia. We observed chronic pancreatitis with loss of acinar cells, acinar-to-ductal metaplasia, and lipomatosis, with upregulation of signaling pathways and impaired acinar cell regeneration. This was associated with ductal cell deficiency characterized by shortened primary cilia. Importantly, the Hnf1bsp2/+ mouse model reproduces the pancreatic features of the human MODY5/HNF1B disease, providing a unique in vivo tool for molecular studies of the endocrine and exocrine defects and to advance basic and translational research. © 2021 The Authors. The Journal of Pathology published by John Wiley & Sons, Ltd. on behalf of The Pathological Society of Great Britain and Ireland.