Defective insulin secretion in response to glucose is an important component of the β cell dysfunction seen in type 2 diabetes. As mitochondrial oxidative phosphorylation plays a key role in glucose-stimulated insulin secretion (GSIS), oxygen-sensing pathways may modulate insulin release. The von Hippel–Lindau (VHL) protein controls the degradation of hypoxia-inducible factor (HIF) to coordinate cellular and organismal responses to altered oxygenation. To determine the role of this pathway in controlling glucose-stimulated insulin release from pancreatic β cells, we generated mice lacking Vhl in pancreatic β cells (βVhlKO mice) and mice lacking Vhl in the pancreas (PVhlKO mice). Both mouse strains developed glucose intolerance with impaired insulin secretion. Furthermore, deletion of Vhl in β cells or the pancreas altered expression of genes involved in β cell function, including those involved in glucose transport and glycolysis, and isolated βVhlKO and PVhlKO islets displayed impaired glucose uptake and defective glucose metabolism. The abnormal glucose homeostasis was dependent on upregulation of Hif-1α expression, and deletion of Hif1a in Vhl-deficient β cells restored GSIS. Consistent with this, expression of activated Hif-1α in a mouse β cell line impaired GSIS. These data suggest that VHL/HIF oxygen-sensing mechanisms play a critical role in glucose homeostasis and that activation of this pathway in response to decreased islet oxygenation may contribute to β cell dysfunction.