IGF-1 and insulin promote -cell expansion by inhibiting -cell death and stimulating -cell proliferation, and the phosphatidylinositol (PI) 3-kinase/Akt pathway mediates insulin and IGF-1 action. Impaired -cell expansion is a risk factor for type 2 diabetes. Here, we identified SH2B1, which is highly expressed in -cells, as a novel regulator of -cell expansion. Silencing of SH2B1 in INS-1 832/13 -cells attenuated insulin- and IGF-1-stimulated activation of the PI 3-kinase/Akt pathway and increased streptozotocin (STZ)-induced apoptosis; conversely, overexpression of SH2B1 had the opposite effects. Activation of the PI 3-kinase/Akt pathway in -cells was impaired in pancreas-specific SH2B1 knockout (PKO) mice fed a high-fat diet (HFD). HFD-fed PKO mice also had increased -cell apoptosis, decreased -cell proliferation, decreased -cell mass, decreased pancreatic insulin content, impaired insulin secretion, and exacerbated glucose intolerance. Furthermore, PKO mice were more susceptible to STZ-induced -cell destruction, insulin deficiency, and hyperglycemia. These data indicate that SH2B1 in -cells is an important prosurvival and proproliferative protein and promotes compensatory -cell expansion in the insulin-resistant state and in response to beta-cell stress.