Diabetes causes pancreatic β cell failure through hyperglycemia-induced oxidative stress, or "glucose toxicity." We show that the forkhead protein FoxO1 protects β cells against oxidative stress by forming a complex with the promyelocytic leukemia protein Pml and the NAD-dependent deacetylase Sirt1 to activate expression of NeuroD and MafA, two Insulin2 (Ins2) gene transcription factors. Using acetylation-defective and acetylation-mimicking mutants, we demonstrate that acetylation targets FoxO1 to Pml and prevents ubiquitin-dependent degradation. We show that hyperglycemia suppresses MafA expression in vivo and that MafA inhibition can be prevented by transgenic expression of constitutively nuclear FoxO1 in β cells. The findings provide a mechanism linking glucose- and growth factor receptor-activated pathways to protect β cells against oxidative damage via FoxO proteins.