AIMS/HYPOTHESIS: Current genetic tests for diagnosing monogenic diabetes rely on selection of the appropriate gene for analysis according to the patient's phenotype. Next-generation sequencing enables the simultaneous analysis of multiple genes in a single test. Our aim was to develop a targeted next-generation sequencing assay to detect mutations in all known MODY and neonatal diabetes genes. METHODS: We selected 29 genes in which mutations have been reported to cause neonatal diabetes, MODY, maternally inherited diabetes and deafness (MIDD) or familial partial lipodystrophy (FPLD). An exon-capture assay was designed to include coding regions and splice sites. A total of 114 patient samples were tested-32 with known mutations and 82 previously tested for MODY (n = 33) or neonatal diabetes (n = 49) but in whom a mutation had not been found. Sequence data were analysed for the presence of base substitutions, small insertions or deletions (indels) and exonic deletions or duplications. RESULTS: In the 32 positive controls we detected all previously identified variants (34 mutations and 36 polymorphisms), including 55 base substitutions, ten small insertions or deletions and five partial/whole gene deletions/duplications. Previously unidentified mutations were found in five patients with MODY (15%) and nine with neonatal diabetes (18%). Most of these patients (12/14) had mutations in genes that had not previously been tested. CONCLUSIONS/INTERPRETATION: Our novel targeted next-generation sequencing assay provides a highly sensitive method for simultaneous analysis of all monogenic diabetes genes. This single test can detect mutations previously identified by Sanger sequencing or multiplex ligation-dependent probe amplification dosage analysis. The increased number of genes tested led to a higher mutation detection rate.