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Understanding the genetic causes of diseases that affect pancreatic β cells and neurons can give insights into pathways essential for both cell types. Microcephaly, epilepsy, and diabetes syndrome (MEDS) is a congenital disorder with two known etiological genes, IER3IP1 and YIPF5. Both genes encode proteins involved in endoplasmic reticulum (ER) to Golgi trafficking. We used genome sequencing to identify 6 individuals with MEDS caused by biallelic variants in the potentially novel disease gene TMEM167A. All had neonatal diabetes (diagnosed at <6 months) and severe microcephaly, and 5 also had epilepsy. TMEM167A is highly expressed in developing and adult human pancreas and brain. To gain insights into the mechanisms leading to diabetes, we silenced TMEM167A in EndoC-βH1 cells and knocked-in one patient's variant, p.Val59Glu, in induced pluripotent stem cells (iPSCs). Both TMEM167A depletion in EndoC-βH1 cells and the p.Val59Glu variant in iPSC-derived β cells sensitized β cells to ER stress. The p.Val59Glu variant impaired proinsulin trafficking to the Golgi and induced iPSC-β cell dysfunction. The discovery of TMEM167A variants as a genetic cause of MEDS highlights a critical role of TMEM167A in the ER to Golgi pathway in β cells and neurons.