KU-32 is a novel, novobiocin-based Hsp90 inhibitor that protects against neuronal glucotoxicity and reverses multiple clinical indices of diabetic peripheral neuropathy in a rodent model. However, any drug with potential for treating diabetic complications must also have no adverse effects on the function of pancreatic islets. Thus, the goal of the current study was to assess the effect of KU-32 on the in vitro viability and function of human islets. Treating human islets with KU-32 for 24 hours showed no toxicity as assessed using the alamarBlue assay. Confocal microscopy confirmed that with a minimum of 2-day exposure, KU-32 improved cellular viability by blocking apoptosis. Functionally, isolated human islets released more glucose-stimulated insulin when preincubated in KU-32. However, diabetic BKS-db/db mice, a model for type 2 diabetes, administered KU-32 for 10 weeks did not show any significant changes in blood glucose and insulin levels, despite having greater insulin staining/beta cell in the pancreas compared to untreated BKS db/db mice. In summary, KU-32 did not harm isolated human islets and may even be protective. However, the effect does not appear significant enough to alter the in vivo metabolic parameters of diabetic mice.