Mutations in the insulin (INS) gene may cause permanent neonatal diabetes mellitus (PNDM). Ins2 mutant mouse models provided important insights into the disease mechanisms of PNDM but have limitations for translational research. To establish a large animal model of PNDM, we generated INSC94Y transgenic pigs. A line expressing high levels of INSC94Y mRNA (70-86% of wildtype INS transcripts) exhibited elevated blood glucose soon after birth but unaltered beta-cell mass at the age of 8 days. At 4.5 months, INSC94Y transgenic pigs exhibited 41% reduced body weight, 72% decreased beta-cell mass (-53% relative to body weight), and 60% lower fasting insulin levels compared with littermate controls. beta-cells of INSC94Y transgenic pigs showed a marked reduction of insulin secretory granules and severe dilation of the endoplasmic reticulum. Cataract development was already visible in 8-day-old INSC94Y transgenic pigs and became more severe with increasing age. Diabetes-associated pathological alterations of kidney and nervous tissue were not detected during the observation period of 1 year. The stable diabetic phenotype and its rescue by insulin treatment make the INSC94Y transgenic pig an attractive model for insulin supplementation and islet transplantation trials, and for studying developmental consequences of maternal diabetes mellitus.