β cells sense glucose through its metabolism and the resulting increase in ATP, which subsequently stimulates insulin secretion. Uncoupling protein-2 (UCP2) mediates mitochondrial proton leak, decreasing ATP production. In the present study, we assessed UCP2's role in regulating insulin secretion. UCP2-deficient mice had higher islet ATP levels and increased glucose-stimulated insulin secretion, establishing that UCP2 negatively regulates insulin secretion. Of pathophysiologic significance, UCP2 was markedly upregulated in islets of ob/ob mice, a model of obesity-induced diabetes. Importantly, ob/ob mice lacking UCP2 had restored first-phase insulin secretion, increased serum insulin levels, and greatly decreased levels of glycemia. These results establish UCP2 as a key component of β cell glucose sensing, and as a critical link between obesity, β cell dysfunction, and type 2 diabetes.