Increased lipid availability is strongly associated with both β-cell dysfunction and insulin resistance, two key facets of type 2 diabetes. Isoforms of the protein kinase C (PKC) family have been viewed as candidates for mediating the effects of fat oversupply because they are lipid-dependent kinases with wide-ranging roles in signal transduction, including the positive and negative modulation of insulin action. Until recently, their involvement was based on correlative studies, but now causative roles for distinct PKC isoforms have also been addressed, in both pancreatic β-cells and insulin-sensitive tissues. Our goal here, therefore, is to review the hitherto disparate fields of PKC function in insulin signaling/resistance on the one hand and in regulating β-cell biology on the other hand. By integrating these two areas, we provide a reappraisal of the current paradigm regarding PKC and type 2 diabetes. In particular, we propose that PKCε warrants further investigation, not merely as a treatment for insulin resistance as previously supposed, but also as a positive regulator of insulin availability.