Autophagy is an evolutionarily conserved machinery for bulk degradation of cytoplasmic components. Here, we report upregulation of autophagosome formation in pancreatic beta cells in diabetic db/db and in nondiabetic high-fat-fed C57BL/6 mice. Free fatty acids (FFAs), which can cause peripheral insulin resistance associated with diabetes, induced autophagy in beta cells. Genetic ablation of atg7 in beta cells resulted in degeneration of islets and impaired glucose tolerance with reduced insulin secretion. While high-fat diet stimulated beta cell autophagy in control mice, it induced profound deterioration of glucose tolerance in autophagy-deficient mutants, partly because of the lack of compensatory increase in beta cell mass. These findings suggest that basal autophagy is important for maintenance of normal islet architecture and function. The results also identified a unique role for inductive autophagy as an adaptive response of beta cells in the presence of insulin resistance induced by high-fat diet.