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Dysfunction of the pancreatic β cell is an important defect in the pathogenesis of type 2 diabetes, although its exact relationship to the insulin resistance is unclear. To determine whether insulin signaling has a functional role in the β cell we have used the Cre-loxP system to specifically inactivate the insulin receptor gene in the β cells. The resultant mice exhibit a selective loss of insulin secretion in response to glucose and a progressive impairment of glucose tolerance. These data indicate an important functional role for the insulin receptor in glucose sensing by the pancreatic β cell and suggest that defects in insulin signaling at the level of the β cell may contribute to the observed alterations in insulin secretion in type 2 diabetes.