Appropriate tuning of protein homeostasis through mobilization of the unfolded protein response (UPR) is key to the capacity of pancreatic beta cells to cope with highly variable demand for insulin synthesis. An efficient UPR ensures a sufficient beta cell mass and secretory output but can also affect beta cell resilience to autoimmune aggression. The factors regulating protein homeostasis in the face of metabolic and immune challenges are insufficiently understood. We examined beta cell adaptation to stress in mice deficient for insulin-degrading enzyme (IDE), a ubiquitous protease with high affinity for insulin and genetic association with type 2 diabetes. IDE deficiency induced a low-level UPR in both C57BL/6 and autoimmune non-obese diabetic (NOD) mice, associated with rapamycin-sensitive beta cell proliferation strongly enhanced by proteotoxic stress. Moreover, in NOD mice, IDE deficiency protected from spontaneous diabetes and triggered an additional independent pathway, conditional on the presence of islet inflammation but inhibited by proteotoxic stress, highlighted by strong upregulation of regenerating islet-derived protein 2, a protein attenuating autoimmune inflammation. Our findings establish a key role of IDE in islet cell protein homeostasis, identify a link between low-level UPR and proliferation, and reveal an UPR-independent anti-inflammatory islet cell response uncovered in the absence of IDE of potential interest in autoimmune diabetes.