Insulin secretion from pancreatic β-cells is critical for maintaining glucose homeostasis and deregulation of circulating insulin levels is associated with the development of metabolic diseases. While many factors have been implicated in the stimulation of insulin secretion, the mechanisms that subsequently reduce insulin secretion remain largely unexplored. Here we demonstrate that mice with β-cell specific ablation of the Y1 receptor exhibit significantly upregulated serum insulin levels associated with increased body weight and adiposity. Interestingly, when challenged with a high fat diet these β-cell specific Y1-deficient mice also develop hyperglycaemia and impaired glucose tolerance. This is most likely due to enhanced hepatic lipid synthesis, resulting in an increase of lipid accumulation in the liver. Together, our study demonstrates that Y1 receptor signaling negatively regulates insulin release, and pharmacological inhibition of Y1 receptor signalling for the treatment of non-insulin dependent diabetes should be taken into careful consideration.