The pancreatic beta-cell senses blood nutrient levels and is modulated by neurohormonal signals so that it secretes insulin according to the need of the organism. Nutrient sensing involves marked metabolic activation, resulting in the production of coupling signals that promote insulin biosynthesis and secretion. The beta-cell's high capacity for nutrient sensing, however, necessitates reduced protection to nutrient toxicity. This potentially explains why in susceptible individuals, chronic fuel surfeit results in beta-cell failure and type 2 diabetes. Here we discuss recent insights into first, the biochemical basis of beta-cell signaling in response to glucose, amino acids and fatty acids, and second, beta-cell nutrient detoxification. We emphasize the emerging role of glycerolipid/fatty acid cycling in these processes.