Pancreatic β cell failure is thought to underlie the progression from glucose intolerance to overt diabetes, and ER stress is implicated in such β cell dysfunction. We have now shown that the transcription factor CCAAT/enhancer-binding protein β (C/EBPβ) accumulated in the islets of diabetic animal models as a result of ER stress before the onset of hyperglycemia. Transgenic overexpression of C/EBPβ specifically in β cells of mice reduced β cell mass and lowered plasma insulin levels, resulting in the development of diabetes. Conversely, genetic ablation of C/EBPβ in the β cells of mouse models of diabetes, including Akita mice, which harbor a heterozygous mutation in Ins2 (Ins2^WT/C96Y), and leptin receptor–deficient (Lepr^–/–) mice, resulted in an increase in β cell mass and ameliorated hyperglycemia. The accumulation of C/EBPβ in pancreatic β cells reduced the abundance of the molecular chaperone glucose-regulated protein of 78 kDa (GRP78) as a result of suppression of the transactivation activity of the transcription factor ATF6α, thereby increasing the vulnerability of these cells to excess ER stress. Our results thus indicate that the accumulation of C/EBPβ in pancreatic β cells contributes to β cell failure in mice by enhancing susceptibility to ER stress.