beta cell dysfunction is an important component of type 2 diabetes, but the molecular basis for this defect is poorly understood. The transcriptional coactivator PGC-1alpha mRNA and protein levels are significantly elevated in islets from multiple animal models of diabetes; adenovirus-mediated expression of PGC-1alpha to levels similar to those present in diabetic rodents produces a marked inhibition of glucose-stimulated insulin secretion from islets in culture and in live mice. This inhibition coincides with changes in metabolic gene expression associated with impaired beta cell function, including the induction of glucose-6-phosphatase and suppression of GLUT2, glucokinase, and glycerol-3-phosphate dehydrogenase. These changes result in blunting of the glucose-induced rise in cellular ATP levels and membrane electrical activity responsible for Ca(2+) influx and insulin exocytosis. These results strongly suggest that PGC-1alpha plays a key functional role in the beta cell and is involved in the pathogenesis of the diabetic phenotype.