β cell dysfunction is a central component of the pathogenesis of type 2 diabetes. Using oligonucleotide microarrays and real-time PCR of pancreatic islets isolated from humans with type 2 diabetes versus normal glucose-tolerant controls, we identified multiple changes in expression of genes known to be important in β cell function, including major decreases in expression of HNF4α, insulin receptor, IRS2, Akt2, and several glucose-metabolic-pathway genes. There was also a 90% decrease in expression of the transcription factor ARNT. Reducing ARNT levels in Min6 cells with small interfering RNA (siRNA) resulted in markedly impaired glucose-stimulated insulin release and changes in gene expression similar to those in human type 2 islets. Likewise, β cell-specific ARNT knockout mice exhibited abnormal glucose tolerance, impaired insulin secretion, and changes in islet gene expression that mimicked those in human diabetic islets. Together, these data suggest an important role for decreased ARNT and altered gene expression in the impaired islet function of human type 2 diabetes.