Diabetes is characterized by an absolute or relative deficiency of pancreatic β-cells. New strategies to accelerate β-cell neogenesis or maintain existing β-cells are desired for future therapies against diabetes. We previously reported that forkhead box O1 (FoxO1) inhibits β-cell growth through a Pdx1-mediated mechanism. However, we also reported that FoxO1 protects against β-cell failure via the induction of NeuroD and MafA. Here, we investigate the physiological roles of FoxO1 in the pancreas by generating the mice with deletion of FoxO1 in the domains of the Pdx1 promoter (P-FoxO1-KO) or the insulin 2 promoter (β-FoxO1-KO) and analyzing the metabolic parameters and pancreatic morphology under two different conditions of increased metabolic demand: high-fat high-sucrose diet (HFHSD) and db/db background. P-FoxO1-KO, but not β-FoxO1-KO, showed improved glucose tolerance with HFHSD. Immunohistochemical analysis revealed that P-FoxO1-KO had increased β-cell mass due to increased islet number rather than islet size, indicating accelerated β-cell neogenesis. Furthermore, insulin-positive pancreatic duct cells were increased in P-FoxO1-KO but not β-FoxO1-KO. In contrast, db/db mice crossed with P-FoxO1-KO or β-FoxO1-KO showed more severe glucose intolerance than control db/db mice due to decreased glucose-responsive insulin secretion. Electron microscope analysis revealed fewer insulin granules in FoxO1 knockout db/db mice. We conclude that FoxO1 functions as a double-edged sword in the pancreas; FoxO1 essentially inhibits β-cell neogenesis from pancreatic duct cells but is required for the maintenance of insulin secretion under metabolic stress.