Secreted proteins are important metabolic regulators. Identifying and characterizing the role of secreted proteins from small tissue depots such as islets of Langerhans, which are required for the proper control of whole-body energy metabolism, remains challenging. Our objective was to identify islet-derived secreted proteins that affect islet function in obesity. Lean and obese mouse islet expression data were analyzed by weighted gene co-expression network analysis (WGCNA) to identify trait-associated modules. Subsequently, genes within these modules were filtered for transcripts that encode for secreted proteins based on intramodular connectivity, module membership, and differential expression. Complement 1q like-3 (C1ql3) secreted protein was identified as a hub gene affecting islet function in obesity. Co-expression network, hierarchal clustering, and gene-ontology based approaches identified a putative role for C1ql3 in regulating β-cell insulin secretion. Biological validation shows that C1ql3 is expressed in β-cells, it inhibits insulin secretion and key genes that are involved in β-cell function. Moreover, the increased expression of C1ql3 is correlated with the reduced insulin secretion in islets of obese mice. Herein, we demonstrate a streamlined approach to effectively screen and determine the function of secreted proteins in islets, and identified C1ql3 as a putative contributor to reduced insulin secretion in obesity, linking C1ql3 to an increased susceptibility to type 2 diabetes.