Prohibitin-2 (Phb-2) controls mitochondrial dynamics and apoptosis. In pancreatic ß-cells, mitochondria play a pivotal role in the control of insulin secretion. In this work, we investigated the role of Prohibitin 2 (Phb2) and mitochondrial dynamics in ß-cell physiology by generating pancreatic ß-cell specific Prohibitin 2 knockout (ß-Phb2-/-) mouse model. Our results show that Phb2 depletion impaired primarily mitochondrial function, insulin secretion and ß-cell survival, eventually leading to diabetes in this mouse model as early as 6 weeks of age. In ß-cells, loss of Phb2 altered stability of L-Opa1 (a mitochondrial protein involved in membrane fusion) and induced mitochondrial fragmentation. Our study shows that prohibitin complex is indispensable for ß-cell maintenance in-vivo. It also demonstrates that regulatory cleavage of Opa1, as well as mitochondrial fusion and stability of mitochondrial genome in ß-cells is controlled by prohibitins. Thus, we have established ß-Phb2-/- mouse as a novel genetic model of mitochondrial diabetes.