The homeodomain transcription factor IPF1/PDX1 is required in β-cells for efficient expression of insulin, glucose transporter 2, and prohormone convertases 1/3 and 2. Psammomys obesus, a model of diet-responsive type 2 diabetes, shows markedly depleted insulin stores when given a high-energy (HE) diet. Despite hyperglycemia, insulin mRNA levels initially remained unchanged and then decreased gradually to 15% of the basal level by 3 weeks. Moreover, insulin gene expression was not increased when isolated P. obesus islets were exposed to elevated glucose concentrations. Consistent with these observations, no functional Ipf1/Pdx1 gene product was detected in islets of newborn or adult P. obesus using immunostaining, Western blot, DNA binding, and reverse transcriptase–polymerase chain reaction analyses. Other β-cell transcription factors (e.g., ISL-1, Nkx2.2, and Nkx6.1) were expressed in P. obesus islets, and the DNA binding activity of the insulin transcription factors RIPE3b1-Act and IEF1 was intact. Ipf1/Pdx1 gene transfer to isolated P. obesus islets normalized the defect in glucose-stimulated insulin gene expression and prevented the rapid depletion of insulin content after exposure to high glucose. Taken together, these results suggest that the inability of P. obesus islets to adapt to dietary overload, with depletion of insulin content as a consequence, results from IPF1/PDX1 deficiency. However, because not all animals become hyperglycemic on HE diet, additional factors may be important for the development of diabetes in this animal model.