Accumulation of unfolded protein within the endoplasmic reticulum (ER) attenuates mRNA translation through PERK-mediated phosphorylation of eukaryotic initiation factor 2 on Ser51 of the alpha subunit (eIF2alpha). To elucidate the role of eIF2alpha phosphorylation, we engineered mice for conditional expression of homozygous Ser51Ala mutant eIF2alpha. The absence of eIF2alpha phosphorylation in beta cells caused a severe diabetic phenotype due to heightened and unregulated proinsulin translation; defective intracellular trafficking of ER cargo proteins; increased oxidative damage; reduced expression of stress response and beta-cell-specific genes; and apoptosis. However, glucose intolerance and beta cell death in these mice were attenuated by a diet containing antioxidant. We conclude that phosphorylation of eIF2alpha coordinately attenuates mRNA translation, prevents oxidative stress, and optimizes ER protein folding to support insulin production. The finding that increased proinsulin synthesis causes oxidative damage in beta cells may reflect events in the beta cell failure associated with insulin resistance in type 2 diabetes.