All major cell types in pancreatic islets express the transforming growth factor (TGF)-beta superfamily receptor ALK7, but the physiological function of this receptor has been unknown. Mutant mice lacking ALK7 showed normal pancreas organogenesis but developed an age-dependent syndrome involving progressive hyperinsulinemia, reduced insulin sensitivity, liver steatosis, impaired glucose tolerance, and islet enlargement. Hyperinsulinemia preceded the development of any other defect, indicating that this may be one primary consequence of the lack of ALK7. In agreement with this, mutant islets showed enhanced insulin secretion under sustained glucose stimulation, indicating that ALK7 negatively regulates glucose-stimulated insulin release in beta-cells. Glucose increased expression of ALK7 and its ligand activin B in islets, but decreased that of activin A, which does not signal through ALK7. The two activins had opposite effects on Ca(2+) signaling in islet cells, with activin A increasing, but activin B decreasing, glucose-stimulated Ca(2+) influx. On its own, activin B had no effect on WT cells, but stimulated Ca(2+) influx in cells lacking ALK7. In accordance with this, mutant mice lacking activin B showed hyperinsulinemia comparable with that of Alk7(-/-) mice, but double mutants showed no additive effects, suggesting that ALK7 and activin B function in a common pathway to regulate insulin secretion. These findings uncover an unexpected antagonism between activins A and B in the control of Ca(2+) signaling in beta-cells. We propose that ALK7 plays an important role in regulating the functional plasticity of pancreatic islets, negatively affecting beta-cell function by mediating the effects of activin B on Ca(2+) signaling.