Prostaglandin E(2) (PGE(2)) is a well-known mediator of beta-cell dysfunction in both type 1 and type 2 diabetes. We recently reported that down-regulation of the Akt pathway activity is implicated in PGE(2)-induced pancreatic beta-cell dysfunction. The aim of this study was to further dissect the signaling pathway of this process in pancreatic beta-cell line HIT-T15 cells and primary mouse islets. We found that PGE(2) time-dependently increased the c-Jun N-terminal kinase (JNK) pathway activity. JNK inhibition by the JNK-specific inhibitor SP600125 reversed PGE(2)-inhibited glucose-stimulated insulin secretion (GSIS). PGE(2) induced dephosphorylation of Akt and FOXO1, leading to nuclear localization and transactivation of FOXO1. Activation of FOXO1 induced nuclear exclusion but had no obvious effect on the whole-cell protein level of pancreatic and duodenal homeobox 1 (PDX1). However, these effects were all attenuated by JNK inhibition. Furthermore, adenovirus-mediated overexpression of dominant-negative (DN)-FOXO1 abolished whereas constitutively active (CA)-FOXO1 mimicked the effects of PGE(2) on GSIS in isolated mouse islets. In addition, we demonstrated that DN-JNK1 but not DN-JNK2 or CA-Akt abolished the PGE(2)-induced AP-1 luciferase reporter activity, whereas DN-JNK1 and CA-Akt but not DN-JNK2 reversed the effect of PGE(2) on FOXO1 transcriptional activity, and overexpression of DN-JNK1 rescued PGE(2)-impaired GSIS in mouse islets. Our results revealed that activation of the JNK is involved in PGE(2)-induced beta-cell dysfunction. PGE(2)-mediated JNK1 activation, through dephosphorylation of Akt and FOXO1, leads to nuclear accumulation of FOXO1 and nucleocytoplasmic shuttling of PDX1, finally resulting in defective GSIS in pancreatic beta-cells.