IA-2 is an enzymatically inactive member of the transmembrane protein tyrosine phosphate family located in dense core secretory vesicles and a major autoantigen in type 1 diabetes. Recent studies showed that targeted disruption of the IA-2 gene in mice resulted in impairment of insulin secretion and glucose intolerance. Insulin homeostasis, however, is a complex process involving a cascade of regulatory factors, and IA-2 is widely expressed in neuroendocrine cells throughout the body. Consequently, it is uncertain whether the impairment of insulin secretion in IA-2 knockout mice is a direct result of the knockout of IA-2 in beta cells or to counter regulatory alterations resulting from IA-2 knockout in other neuroendocrine cells. To define the function of IA-2, we studied the secretion of insulin in a single cell type, MIN-6, by overexpressing and knocking down IA-2. Our experiments showed that overexpression of IA-2 resulted in a 6-fold increase in glucose- or K⁺-induced insulin secretion and a ≈3-fold increase in the number of secretory vesicles and the insulin content of cells. In contrast, knockdown of endogenous IA-2 by short interfering RNA resulted in nearly a complete loss of glucose-induced insulin secretion and a 50% decrease in basal insulin release. The half-life of insulin in cells overexpressing IA-2 was nearly twice as great as that in mock-transfected cells, suggesting that IA-2 was stabilizing the insulin-containing vesicles. From these results we conclude that in beta cells, IA-2 is an important regulator of dense core vesicle number and glucose-induced and basal insulin secretion.