The endoplasmic reticulum (ER) is a cellular compartment responsible for multiple important cellular functions including the biosynthesis and folding of newly synthesized proteins destined for secretion, such as insulin. A myriad of pathological and physiological factors perturb ER function and cause dysregulation of ER homeostasis, leading to ER stress. ER stress elicits a signaling cascade to mitigate stress, the unfolded protein response (UPR). As long as the UPR can relieve stress, cells can produce the proper amount of proteins and maintain ER homeostasis. If the UPR, however, fails to maintain ER homeostasis, cells will undergo apoptosis. Activation of the UPR is critical to the survival of insulin-producing pancreatic beta-cells with high secretory protein production. Any disruption of ER homeostasis in beta-cells can lead to cell death and contribute to the pathogenesis of diabetes. There are several models of ER-stress-mediated diabetes. In this review, we outline the underlying molecular mechanisms of ER-stress-mediated beta-cell dysfunction and death during the progression of diabetes.