Insulinoma-associated protein (IA)-2β, also known as phogrin, is an enzymatically inactive member of the transmembrane protein tyrosine phosphatase family and is located in dense-core secretory vesicles. In patients with type 1 diabetes, autoantibodies to IA-2β appear years before the development of clinical disease. The genomic structure and function of IA-2β, however, is not known. In the present study, we determined the genomic structure of IA-2β and found that both human and mouse IA-2β consist of 23 exons and span ∼1,000 and 800 kb, respectively. With this information, we prepared a targeting construct and inactivated the mouse IA-2β gene as demonstrated by lack of IA-2β mRNA and protein expression. The IA-2β^−/− mice, in contrast to wild-type controls, showed mild glucose intolerance and impaired glucose-stimulated insulin secretion. Knockout of the IA-2β gene in NOD mice, the most widely studied animal model for human type 1 diabetes, failed to prevent the development of cyclophosphamide-induced diabetes. We conclude that IA-2β is involved in insulin secretion, but despite its importance as a major autoantigen in human type 1 diabetes, it is not required for the development of diabetes in NOD mice.