The total mass of islets of Langerhans is reduced in individuals with type 2 diabetes, possibly contributing to the pathogenesis of this condition. Although the regulation of islet mass is complex, recent studies have suggested the importance of a signaling pathway that includes the insulin or insulin-like growth factor-1 receptors, insulin receptor substrate and phosphatidylinositol (PI) 3-kinase. 3-Phosphoinositide-dependent protein kinase 1 (PDK1) is a serine-threonine kinase that mediates signaling downstream of PI 3-kinase. Here we show that mice that lack PDK1 specifically in pancreatic beta cells (betaPdk1-/- mice) develop progressive hyperglycemia as a result of a loss of islet mass. The mice show reductions in islet density as well as in the number and size of cells. Haploinsufficiency of the gene for the transcription factor Foxo1 resulted in a marked increase in the number, but not the size, of cells and resulted in the restoration of glucose homeostasis in betaPdk1-/- mice. These results suggest that PDK1 is important in maintenance of pancreatic cell mass and glucose homeostasis.