The Irs2 branch of the insulin/insulin-like growth factor signaling cascade activates the phosphatidylinositol 3-kinase --> Akt --> Foxo1 cascade in many tissues, including hepatocytes and pancreatic beta-cells. The 3'-lipid phosphatase Pten ordinarily attenuates this cascade; however, its influence on beta-cell growth or function is unknown. To determine whether decreased Pten expression could restore beta-cell function and prevent diabetes in Irs2(-/-) mice, we generated wild type or Irs2 knock-out mice that were haploinsufficient for Pten (Irs2(-/-)::Pten(+/-)). Irs2(-/-) mice develop diabetes by 3 months of age as beta-cell mass declined progressively until insulin production was lost. Pten insufficiency increased peripheral insulin sensitivity in wild type and Irs2(-/-) mice and increased Akt and Foxo1 phosphorylation in the islets. Glucose tolerance improved in the Pten(+/-) mice, although beta-cell mass and circulating insulin levels decreased. Compared with Irs2(-/-) mice, the Irs2(-/-)::Pten(+/-) mice displayed nearly normal glucose tolerance and survived without diabetes, because normal but small islets produced sufficient insulin until the mice died of lymphoproliferative disease at 12 months age. Thus, steps to enhance phosphatidylinositol 3-kinase signaling can promote beta-cell growth, function, and survival without the Irs2 branch of the insulin/insulin-like growth factor signaling cascade.