CREB mediates the transcriptional effects of glucose and incretin hormones in insulin-target cells and insulin-producing β-cells. Although the inhibition of CREB activity is known to decrease the β-cell mass, it is still unknown what factors inversely alter the CREB signaling pathway in β-cells. Here, we show that β-cell dysfunctions occurring in chronic hyperglycemia are not caused by simple inhibition of CREB activity but rather by the persistent activation of CREB due to decreases in protein phophatase PP2A. When freshly isolated rat pancreatic islets were chronically exposed to 25 mM (high) glucose, the PP2A activity was reduced with a concomitant increase in active pCREB. Brief challenges with 15 mM glucose or 30 µM forskolin after 2 hour fasting further increased the level of pCREB and consequently induced the persistent expression of ICER. The excessively produced ICER was sufficient to repress the transcription of NeuroD, insulin, and SUR1 genes. In contrast, when islets were grown in 5 mM (low) glucose, CREB was transiently activated in response to glucose or forskolin stimuli. Thus, ICER expression was transient and insufficient to repress those target genes. Importantly, overexpression of PP2A reversed the adverse effects of chronic hyperglycemia and successfully restored the transient activation of CREB and ICER. Conversely, depletion of PP2A with siRNA was sufficient to disrupt the negative feedback regulation of CREB and induce hyperglycemic phenotypes even under low glucose conditions. Our findings suggest that the failure of the negative feedback regulation of CREB is the primary cause for β-cell dysfunctions under conditions of pathogenic hyperglycemia, and PP2A can be a novel target for future therapies aiming to protect β-cells mass in the late transitional phase of non-insulin dependent type 2 diabetes (NIDDM).