The insulin and IGF signaling pathways are critical for development and maintenance of pancreatic beta cell mass and function. The serine-threonine kinase Akt is one of several mediators regulated by these pathways. We have studied the role of Akt in pancreatic beta cell physiology by generating transgenic mice expressing a kinase-dead mutant of this enzyme in beta cells. Reduction of Akt activity in transgenic animals resulted in impaired glucose tolerance due to defective insulin secretion. The mechanisms involved in dysregulation of secretion in these mice lie at the level of insulin exocytosis and are not the result of abnormalities in glucose signaling or function of voltage-gated Ca2+ channels. Therefore, transgenic mice showed increased susceptibility to developing glucose intolerance and diabetes following fat feeding. These observations suggest that Akt plays a novel and important role in the regulation of distal components of the secretory pathway and that this enzyme represents a therapeutic target for improvement of beta cell function in diabetes.