In early stage of diabetes, insulin secretion from pancreatic β-cells is increased to deal with the elevated blood glucose. Previous studies have reported that islet-produced carbon monoxide (CO) is associated with increased glucose-stimulated insulin secretion from β-cells. However, this compensatory mechanism by which CO may act to enhance β-cell function remain unclear. In this study, we revealed that CO promoted intracellular calcium ([Ca2+]i) elevation and glucose-stimulated insulin secretion (GSIS) from pancreatic β-cells in leptin receptor deficient db/db mice but not in C57 mice. The stimulatory effects of CO on β-cell function in db/db mice was blocked by inhibition of Phospholipase C (PLC) signaling pathway. We further demonstrated that CO triggered [Ca2+]i transients and enhanced GSIS in C57 islets when β-cells overexpressed with PLCγ1 and PLCδ1, but not PLCβ1. On the other hand, reducing PLCγ1 and PLCδ1 expressions in db/db islets dramatically attenuated the stimulatory effects of CO on β-cell function, whereas interfering PLCβ1 expression had no effects on CO-induced β-cell function enhancement. Our findings showing that CO elevated [Ca2+]i and enhanced GSIS by activating PLC signaling through PLCγ1 and PLCδ1 isoforms in db/db pancreatic β-cells may suggest an important mechanism by which CO promotes β-cell function to prevent hyperglycemia. Our study may also provide new insights into the therapy for type II diabetes and offer a potential target for therapeutic applications of CO.