The endoplasmic reticulum (ER) transmits apoptotic signals in the pancreas during ER stress, implicating ER stress–mediated apoptosis in the development of diabetes. P58IPK (DNAJC3) is induced during ER stress and functions as a negative feedback component to inhibit eIF-2α signaling and attenuate the later phases of the ER stress response. To gain insight into a more comprehensive role of P58IPK function, we generated deletion mutant mice that showed a gradual onset of glucosuria and hyperglycemia associated with increasing apoptosis of pancreatic islet cells. Lack of P58IPK had no apparent effect on the functional integrity of viable β-cells. A set of genes associated with apoptosis showed altered expression in pancreatic islets from P58IPK-null mice, further substantiating the apoptosis phenotype. The data provide in vivo evidence to support the concept that P58IPK functions as a signal for the downregulation of ER-associated proteins involved in the initial ER stress response, thus preventing excessive cell loss by degradation pathways. Insulin deficiency associated with the absence of P58IPK mimics β-cell failure associated with type 1 and late-stage type 2 diabetes. P58IPK function and activity may therefore provide a novel area of investigation into ER-mediated mechanistic and therapeutic approaches for diabetes.