Insulin controls glucose homeostasis by regulating glucose use in peripheral tissues, and its own production and secretion in pancreatic beta cells. These responses are largely mediated downstream of the insulin receptor substrates, IRS-1 and IRS-2 (refs 4-8), through distinct signalling pathways. Although a number of effectors of these pathways have been identified, their roles in mediating glucose homeostasis are poorly defined. Here we show that mice deficient for S6 kinase 1, an effector of the phosphatidylinositide-3-OH kinase signalling pathway, are hypoinsulinaemic and glucose intolerant. Whereas insulin resistance is not observed in isolated muscle, such mice exhibit a sharp reduction in glucose-induced insulin secretion and in pancreatic insulin content. This is not due to a lesion in glucose sensing or insulin production, but to a reduction in pancreatic endocrine mass, which is accounted for by a selective decrease in beta-cell size. The observed phenotype closely parallels those of preclinical type 2 diabetes mellitus, in which malnutrition-induced hypoinsulinaemia predisposes individuals to glucose intolerance.