NADPH oxidases (NOX-es) produce reactive oxygen species and modulate β-cell insulin secretion. Islets of Type2 diabetic subjects present elevated expression of NOX5. Here we sought to characterize regulation of NOX5 expression in human islets in vitro and to uncover the relevance of NOX5 in islet function in vivo using a novel mouse model expressing NOX5 in doxycycline-inducible, β-cell-specific manner (RIP/rtTA/NOX5 mice). In situ hybridization and immunohistochemistry employed on pancreatic sections demonstrated NOX5 mRNA and protein expressions in human islets. In cultures of dispersed islets NOX5 protein was observed in somatostatin-positive (δ) cells in basal (2.8mM glucose) conditions. siRNA-mediated knock-down of NOX5 in human islets cultured in basal glucose concentrations resulted in diminished glucose-induced insulin secretion in vitro. However, when islets were preincubated in high (16.7mM) glucose media for 12 hours, NOX5 appeared also in insulin-positive (β) cells. In vivo, mice with β-cell NOX5 expression developed aggravated impairment of glucose-induced insulin secretion compared to control mice when challenged with 14 weeks of high-fat diet. Similarly, in vitro palmitate pre-incubation resulted in more severe reduction of insulin release in islets of RIP/rtTA/NOX5 mice compared to their control littermates. Decreased insulin secretion was most distinct in response to theophylline stimulation suggesting impaired cAMP-mediated signaling due to increased phophodiesterase activation. Our data provide the first insight into the complex regulation and function of NOX5 in islets implying an important role for NOX5 in δ-cell mediated intra-islet crosstalk in physiological circumstances but also identifying it as an aggravating factor in β-cell failure in diabetic conditions.