Proinsulin misfolding in the endoplasmic reticulum (ER) initiates a cell death response, although the mechanism(s) remains unknown. To provide insight into how protein misfolding may cause β-cell failure, we analyzed mice with the deletion of P58^IPK/DnajC3, an ER luminal co-chaperone. P58^IPK−/− mice become diabetic as a result of decreased β-cell function and mass accompanied by induction of oxidative stress and cell death. Treatment with a chemical chaperone, as well as deletion of Chop, improved β-cell function and ameliorated the diabetic phenotype in P58^IPK−/− mice, suggesting P58^IPK deletion causes β-cell death through ER stress. Significantly, a diet of chow supplemented with antioxidant dramatically and rapidly restored β-cell function in P58^IPK−/− mice and corrected abnormal localization of MafA, a critical transcription factor for β-cell function. Antioxidant feeding also preserved β-cell function in Akita mice that express mutant misfolded proinsulin. Therefore defective protein folding in the β-cell causes oxidative stress as an essential proximal signal required for apoptosis in response to ER stress. Remarkably, these findings demonstrate that antioxidant feeding restores cell function upon deletion of an ER molecular chaperone. Therefore antioxidant or chemical chaperone treatment may be a promising therapeutic approach for type 2 diabetes.