The maintenance of intracellular Ca(2+) homeostasis in the pancreatic β-cell is closely regulated by activity of the sarco-endoplasmic reticulum Ca(2+) ATPase (SERCA) pump. Our data demonstrate a loss of β-cell SERCA2b expression in several models of type 2 diabetes including islets from db/db mice and cadaveric diabetic human islets. Treatment of 832/13 rat INS-1-derived cells with 25 mm glucose and the proinflammatory cytokine IL-1β led to a similar loss of SERCA2b expression, which was prevented by treatment with the peroxisome proliferator-activated receptor (PPAR)-γ agonist, pioglitazone. Pioglitazone was able to also protect against hyperglycemia and cytokine-induced elevations in cytosolic Ca(2+) levels, insulin-secretory defects, and cell death. To determine whether PPAR-γ was a direct transcriptional regulator of the SERCA2 gene, luciferase assays were performed and showed that a -259 bp region is sufficient to confer PPAR-γ transactivation; EMSA and chromatin immunoprecipitation experiments confirmed that PPAR-γ directly binds a PPAR response element in this proximal region. We next sought to characterize the mechanisms by which SERCA2b was down-regulated. INS-1 cells were exposed to high glucose and IL-1β in time course experiments. Within 2 h of exposure, activation of cyclin-dependent kinase 5 (CDK5) was observed and correlated with increased serine-273 phosphorylation of PPAR-γ and loss of SERCA2 protein expression, findings that were prevented by pioglitazone and roscovitine, a pharmacological inhibitor of CDK5. We conclude that pioglitazone modulates SERCA2b expression through direct transcriptional regulation of the gene and indirectly through prevention of CDK5-induced phosphorylation of PPAR-γ.