RCAN1 is a chromosome 21 gene that controls secretion in endocrine cells, regulates mitochondrial function, and is sensitive to oxidative stress. Regulator of calcineurin 1 (RCAN1) is also an endogenous inhibitor of the protein phosphatase calcineurin, the inhibition of which leads to hypoinsulinemia and diabetes in humans and mice. However, the presence or the role of RCAN1 in insulin-secreting β-cells and its potential role in the pathogenesis of diabetes is unknown. Hence, the aim of this study is to investigate the presence of RCAN1 in β-cells and identify its role in β-cell function. RCAN1 is expressed in mouse islets and in the cytosol of pancreatic β-cells. We find RCAN1 is a glucose-responsive gene with a 1.5-fold increase in expression observed in pancreatic islets in response to chronic hyperglycemia. The overexpression of the human RCAN1.1 isoform in mice under the regulation of its endogenous promoter causes diabetes, age-associated hyperglycemia, reduced glucose tolerance, hypoinsulinemia, loss of β-cells, reduced β-cell insulin secretion, aberrant mitochondrial reactive oxygen species production, and the down-regulation of key β-cell genes. Our data therefore identifies a novel molecular link between the overexpression of RCAN1 and β-cell dysfunction. The glucose-responsive nature of RCAN1 provides a potential mechanism of action associated with the β-cell dysfunction observed in diabetes.