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Diets high in fat have an effect on both of the cardinal features of type 2 diabetes mellitus, insulin resistance and beta cell dysfunction. However, the mechanisms by which high fat diet is detrimental to beta cell function are only partially elucidated. Impaired glucose stimulated insulin secretion and hyperproinsulinaemia are well documented in this disease. In addition, these two characteristics are ATP dependent. Therefore there might be some defect in ATP availability in beta cells in type 2 diabetes. Uncoupling protein 2 (UCP2) is a negative regulator of ATP production and its expression is elevated in diabetic models and by dietary fat. Therefore it is plausible that the defective insulin secretion and proinsulin processing found in diabetic patients might result from increased expression of beta cell UCP2. The overall hypothesis of this thesis is that chronic high fatty acid exposure would induce UCP2, subsequently reducing ATP, to impair glucose stimulated insulin secretion and proinsulin conversion to mature insulin. To test this hypothesis, three studies were carried out using paradigms predicted to increase UCP2 expression. In the first study, UCP2 cDNA was directly transfected into INS-1 cells. In the second study, INS-1 cells were cultured in the presence of fatty acid. The last study was an in vivo study in which wildtype and UCP2 knockout mice were fed with either standard rodent chow or high fat diet for five weeks.