Pancreatic beta cells rely heavily on the endoplasmic reticulum (ER) to process folding and posttranslational modification of a large amount of insulin and many other proteins and are therefore vulnerable to ER stress. The role of the ER is thus crucial in the regulation of beta cell function and survival through the unfolded protein response (UPR) pathways. However, the UPR can either allow cells to survive by adapting to stress or kill cells through apoptosis in a context-dependent manner. How cell fate is determined following UPR activation remains enigmatic. In this review, we discuss the molecular mechanisms linking ER stress to beta cell survival or apoptosis. Specifically, we focus on the role of the cellular inhibitor of apoptosis protein-1 and propose a new model for understanding survival of beta cells undergoing ER stress.