Irreversible failure of pancreatic β-cells is the main culprit in the pathophysiology of diabetes, a disease that is now a global epidemic. Recently, elevated plasma levels of deoxysphingolipids, including 1-deoxysphinganine, have been identified as a novel biomarker for the disease. In this study, we analyzed whether deoxysphingolipids directly compromise the functionality of insulin-producing Ins-1 cells and primary islets. Treatment with 1-deoxysphinganine induced dose-dependent cytotoxicity with senescent, necrotic, and apoptotic characteristics and compromised glucose-stimulated insulin secretion. In addition, 1-deoxysphinganine altered cytoskeleton dynamics, resulting in intracellular accumulation of filamentous actin and activation of the Rho family GTPase Rac1. Moreover, 1-deoxysphinganine selectively upregulated ceramide synthase 5 expression and was converted to 1-deoxy-dihydroceramides without altering normal ceramide levels. Inhibition of intracellular 1-deoxysphinganine trafficking and ceramide synthesis improved the viability of the cells, indicating that the intracellular metabolites of 1-deoxysphinganine contribute to its cytotoxicity. Analyses of signaling pathways identified Jun N-terminal kinase and p38 mitogen-activated protein kinase as antagonistic effectors of cellular senescence. The results revealed that 1-deoxysphinganine is a cytotoxic lipid for insulin-producing cells, suggesting that the increased levels of this sphingolipid observed in diabetic patients may contribute to the reduced functionality of pancreatic β-cells. Thus, targeting deoxysphingolipid synthesis may complement the currently available therapies for diabetes.