Type 2 diabetes (T2D) is associated with pancreatic β-cell dysfunction, manifested by reduced glucose-stimulated insulin secretion (GSIS). Several transcription factors enriched in β-cells, such as MafA, control β-cell function by organizing genes involved in GSIS. Here we demonstrate that nardilysin (N-arginine dibasic convertase; Nrd1 and NRDc) critically regulates β-cell function through MafA. Nrd1^−/− mice showed glucose intolerance and severely decreased GSIS. Islets isolated from Nrd1^−/− mice exhibited reduced insulin content and impaired GSIS in vitro. Moreover, β-cell-specific NRDc-deficient (Nrd1^delβ) mice showed a diabetic phenotype with markedly reduced GSIS. MafA was specifically downregulated in islets from Nrd1^delβ mice, whereas overexpression of NRDc upregulated MafA and insulin expression in INS832/13 cells. Chromatin immunoprecipitation assay revealed that NRDc is associated with Islet-1 in the enhancer region of MafA, where NRDc controls the recruitment of Islet-1 and MafA transcription. Our findings demonstrate that NRDc controls β-cell function via regulation of the Islet-1–MafA pathway.