Preserving β-cell function during the development of obesity and insulin resistance would limit the worldwide epidemic of type 2 diabetes. Endoplasmic reticulum (ER) calcium (Ca(2+)) depletion induced by saturated free fatty acids and cytokines causes β-cell ER stress and apoptosis, but the molecular mechanisms behind these phenomena are still poorly understood. Here, we demonstrate that palmitate-induced sorcin downregulation and subsequent increases in glucose-6-phosphatase catalytic subunit-2 (G6PC2) levels contribute to lipotoxicity. Sorcin is a calcium sensor protein involved in maintaining ER Ca(2+) by inhibiting ryanodine receptor activity and playing a role in terminating Ca(2+)-induced Ca(2+) release. G6PC2, a genome-wide association study gene associated with fasting blood glucose, is a negative regulator of glucose-stimulated insulin secretion (GSIS). High-fat feeding in mice and chronic exposure of human islets to palmitate decreases endogenous sorcin expression while levels of G6PC2 mRNA increase. Sorcin-null mice are glucose intolerant, with markedly impaired GSIS and increased expression of G6pc2 Under high-fat diet, mice overexpressing sorcin in the β-cell display improved glucose tolerance, fasting blood glucose, and GSIS, whereas G6PC2 levels are decreased and cytosolic and ER Ca(2+) are increased in transgenic islets. Sorcin may thus provide a target for intervention in type 2 diabetes.