The insulin receptor substrate-2 (Irs2) branch of the insulin/IGF signaling system coordinates peripheral insulin action and pancreatic β cell function, so mice lacking Irs2 display similarities to humans with type 2 diabetes. Here we show that β cell–specific expression of Irs2 at a low or a high level delivered a graded physiologic response that promoted β cell growth, survival, and insulin secretion that prevented diabetes in Irs2^–/– mice, obese mice, and streptozotocin-treated mice; and that upon transplantation, the transgenic islets cured diabetes more effectively than WT islets. Thus, pharmacological approaches that promote Irs2 expression in β cells, especially specific cAMP agonists, could be rational treatments for β cell failure and diabetes.