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Chicken ovalbumin upstream promoter-transcription factor II (COUP-TFII) has been implicated in the control of blood glucose by its potent effect on expression and signaling of various nuclear receptors. To understand the role of COUP-TFII in glucose homeostasis, conditional COUP-TFII-deficient mice were generated and crossed with mice expressing Cre under the control of rat insulin II gene promoter, resulting in deletion of COUP-TFII in pancreatic β-cells. Homozygous mutants died before birth for yet undetermined reasons. Heterozygous mice appeared healthy at birth and showed normal growth and fertility. When challenged intraperitoneally, the animals had glucose intolerance associated with reduced glucose-stimulated insulin secretion. Moreover, these heterozygous mice presented a mild increase in fasting and random-fed circulating insulin levels. In accordance, islets isolated from these animals exhibited higher insulin secretion in low glucose conditions and markedly decreased glucose-stimulated insulin secretion. Their pancreata presented normal microscopic architecture and insulin content up to 16 weeks of study. Altered insulin secretion was associated with peripheral insulin resistance in whole animals. It can be concluded that COUP-TFII is a new, important regulator of glucose homeostasis and insulin sensitivity.