The transcription factor Pdx1 is crucial to islet β cell function and regulates target genes in part through interaction with coregulatory factors. Set7/9 is a Lys methyltransferase that interacts with Pdx1. Here we tested the hypothesis that Lys methylation of Pdx1 by Set7/9 augments Pdx1 transcriptional activity. Using mass spectrometry and mutational analysis of purified proteins, we found that Set7/9 methylates the N-terminal residues Lys-123 and Lys-131 of Pdx1. Methylation of these residues occurred only in the context of intact, full-length Pdx1, suggesting a specific requirement of secondary and/or tertiary structural elements for catalysis by Set7/9. Immunoprecipitation assays and mass spectrometric analysis using β cells verified Lys methylation of endogenous Pdx1. Cell-based luciferase reporter assays using wild-type and mutant transgenes revealed a requirement of Pdx1 residue Lys-131, but not Lys-123, for transcriptional augmentation by Set7/9. Lys-131 was not required for high-affinity interactions with DNA in vitro, suggesting that its methylation likely enhances post-DNA binding events. To define the role of Set7/9 in β cell function, we generated mutant mice in which the gene encoding Set7/9 was conditionally deleted in β cells (Set Δβ). SetΔβ mice exhibited glucose intolerance similar to Pdx1-deficient mice, and their isolated islets showed impaired glucose-stimulated insulin secretion with reductions in expression of Pdx1 target genes. Our results suggest a previously unappreciated role for Set7/9-mediated methylation in the maintenance of Pdx1 activity and β cell function.