Pancreatic-islet inflammation contributes to the failure of β cell insulin secretion during obesity and type 2 diabetes. However, little is known about the nature and function of resident immune cells in this context or in homeostasis. Here we show that interleukin (IL)-33 was produced by islet mesenchymal cells and enhanced by a diabetes milieu (glucose, IL-1β, and palmitate). IL-33 promoted β cell function through islet-resident group 2 innate lymphoid cells (ILC2s) that elicited retinoic acid (RA)-producing capacities in macrophages and dendritic cells via the secretion of IL-13 and colony-stimulating factor 2. In turn, local RA signaled to the β cells to increase insulin secretion. This IL-33-ILC2 axis was activated after acute β cell stress but was defective during chronic obesity. Accordingly, IL-33 injections rescued islet function in obese mice. Our findings provide evidence that an immunometabolic crosstalk between islet-derived IL-33, ILC2s, and myeloid cells fosters insulin secretion.