Pancreatic beta cell failure is thought to underlie the progression from glucose intolerance to overt diabetes, and ER stress is implicated in such beta cell dysfunction. We have now shown that the transcription factor CCAAT/enhancer-binding protein beta (C/EBPbeta) accumulated in the islets of diabetic animal models as a result of ER stress before the onset of hyperglycemia. Transgenic overexpression of C/EBPbeta specifically in beta cells of mice reduced beta cell mass and lowered plasma insulin levels, resulting in the development of diabetes. Conversely, genetic ablation of C/EBPbeta in the beta cells of mouse models of diabetes, including Akita mice, which harbor a heterozygous mutation in Ins2 (Ins2WT/C96Y), and leptin receptor-deficient (Lepr-/-) mice, resulted in an increase in beta cell mass and ameliorated hyperglycemia. The accumulation of C/EBPbeta in pancreatic beta cells reduced the abundance of the molecular chaperone glucose-regulated protein of 78 kDa (GRP78) as a result of suppression of the transactivation activity of the transcription factor ATF6alpha, thereby increasing the vulnerability of these cells to excess ER stress. Our results thus indicate that the accumulation of C/EBPbeta in pancreatic beta cells contributes to beta cell failure in mice by enhancing susceptibility to ER stress.