Type 2 diabetes mellitus (T2DM) represents a rapidly increasing threat to global public health. T2DM arises largely from obesity, poor diet, and lack of exercise, but it also involves genetic predisposition. Here we report that the KCNE2 potassium channel transmembrane regulatory subunit is expressed in human and mouse pancreatic β cells. Kcne2 deletion in mice impaired glucose tolerance as early as 5 wk of age in pups fed a Western diet, ultimately causing diabetes. In adult mice fed normal chow, skeletal muscle expression of insulin receptor β and insulin receptor substrate 1 were down-regulated 2-fold by Kcne2 deletion, characteristic of T2DM. Kcne2 deletion also caused extensive pancreatic transcriptome changes consistent with facets of T2DM, including endoplasmic reticulum stress, inflammation, and hyperproliferation. Kcne2 deletion impaired β-cell insulin secretion in vitro up to 8-fold and diminished β-cell peak outward K+ current at positive membrane potentials, but also left-shifted its voltage dependence and slowed inactivation. Interestingly, we also observed an aging-dependent reduction in β-cell outward currents in both Kcne2+/+ and Kcne2-/- mice. Our results demonstrate that KCNE2 is required for normal β-cell electrical activity and insulin secretion, and that Kcne2 deletion causes T2DM. KCNE2 may regulate multiple K+ channels in β cells, including the T2DM-linked KCNQ1 potassium channel α subunit.-Lee, S. M., Baik, J., Nguyen, D., Nguyen, V., Liu, S., Hu, Z., Abbott, G. W. Kcne2 deletion impairs insulin secretion and causes type 2 diabetes mellitus.