Obesity is the key driver of peripheral insulin resistance, one of the key features of type 2 diabetes (T2D). In insulin-resistant individuals, the expansion of beta-cell mass is able to delay or even prevent the onset of overt T2D. Here, we report that beta-arrestin-1 (barr1), an intracellular protein known to regulate signaling through G protein-coupled receptors, is essential for beta-cell replication and function in insulin-resistant mice maintained on an obesogenic diet. Specifically, insulin-resistant beta-cell-specific barr1 knockout mice display marked reductions in beta-cell mass and the rate of beta-cell proliferation, associated with pronounced impairments in glucose homeostasis. Mechanistic studies suggest that the observed metabolic deficits are due to reduced Pdx1 expression levels caused by beta-cell barr1 deficiency. These findings indicate that strategies aimed at enhancing barr1 activity and/or expression in beta-cells may prove useful to restore proper glucose homeostasis in T2D.