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Background: Insulin synthesis and cell proliferation are under tight regulation in pancreatic β-cells to maintain glucose homeostasis. Dysfunction in either aspect leads to development of diabetes. PERK (EIF2AK3) loss of function mutations in humans and mice exhibit permanent neonatal diabetes that is characterized by insufficient β-cell mass and reduced proinsulin trafficking and insulin secretion. Unexpectedly, we found that Perk heterozygous mice displayed lower blood glucose levels. Methodology: Longitudinal studies were conducted to assess serum glucose and insulin, intracellular insulin synthesis and storage, insulin secretion, and β-cell proliferation in Perk heterozygous mice. In addition, modulation of Perk dosage specifically in β-cells showed that the glucose homeostasis phenotype of Perk heterozygous mice is determined by reduced expression of PERK in the β-cells. Principal Findings: We found that Perk heterozygous mice first exhibited enhanced insulin synthesis and secretion during neonatal and juvenile development followed by enhanced β-cell proliferation and a substantial increase in β-cell mass at the adult stage. These differences are not likely to entail the well-known function of PERK to regulate the ER stress response in cultured cells as several markers for ER stress were not differentially expressed in Perk heterozygous mice. Conclusions: In addition to the essential functions of PERK in β-cells as revealed by severely diabetic phenotype in humans and mice completely deficient for PERK, reducing Perk gene expression by half showed that intermediate levels of PERK have a profound impact on β-cell functions and glucose homeostasis. These results suggest that an optimal level of PERK expression is necessary to balance several parameters of β-cell function and growth in order to achieve normoglycemia. [ABSTRACT FROM AUTHOR]