Insulin therapy improves β-cell function in early stages of diabetes by mechanisms that may exceed alleviation of glucotoxicity. In advance type 2 diabetes, hyperglycemia causes β-cell damage and ultimately β-cell loss. At such an advanced stage, therapeutic modalities are often inadequate. Growing evidence indicates that in early stages of type-2 diabetes and some types of monogenic diabetes linked with malfunctioning endoplasmic-reticulum (ER), the β-cell ER fails to process sufficient proinsulin once it becomes overloaded. These changes manifest with ER distention (ER-crowding) and deficiency of secretory granules. We hypothesize that insulin therapy may improves β-cell function by alleviating ER-crowding. To support this hypothesis, we investigated pre-diabetic β-cell changes in hProC(A7)Y-CpepGFP transgenic mice that develop prolonged pre-diabetes due to proinsulin dysmaturation and ER-crowding. We attenuated the β-cell ER proinsulin synthesis with a treat-to-target insulin therapy while avoiding hypoglycemia and weight gain. Alleviation of ER-crowding resulted in temporary improvement in proinsulin maturation, insulin secretion and glucose tolerance. Our observations suggest that alleviation of pre-diabetic ER-crowding using a treat-to-target insulin therapy may improve β-cell function and may prevent further metabolic deterioration.