The cyclic AMP (cAMP) signaling pathway is central in β-cell gene expression and function. In the nucleus, protein kinase A (PKA) phosphorylates CREB, resulting in recruitment of the transcriptional coactivators p300 and CREB binding protein (CBP). CBP, but not p300, is phosphorylated at serine 436 in response to insulin action. CBP phosphorylation disrupts CREB-CBP interaction and thus reduces nuclear cAMP action. To elucidate the importance of the cAMP-PKA-CREB-CBP pathway in pancreatic β cells specifically at the nuclear level, we have examined mutant mice lacking the insulin-dependent phosphorylation site of CBP. In these mice, the CREB-CBP interaction is enhanced in both the absence and presence of cAMP stimulation. We found that islet and β-cell masses were increased twofold, while pancreas weights were not different from the weights of wild-type littermates. β-Cell proliferation was increased both in vivo and in vitro in isolated islet cultures. Surprisingly, glucose-stimulated insulin secretion from perfused, isolated mutant islets was reduced. However, β-cell depolarization with KCl induced similar levels of insulin release from mutant and wild-type islets, indicating normal insulin synthesis and storage. In addition, transcripts of pgc1a, which disrupts glucose-stimulated insulin secretion, were also markedly elevated. In conclusion, sustained activation of CBP-responsive genes results in increased β-cell proliferation. In these β cells, however, glucose-stimulated insulin secretion was diminished, resulting from concomitant CREB-CBP-mediated pgc1a gene activation.