The lysosomal enzyme iduronate-2-sulfatase (IDS) is expressed in pancreatic islets and is responsible for degradation of proteoglycans, such as perlecan and dermatan sulfate. To determine the role of IDS in islets, expression and regulation of the gene and localization of the enzyme were investigated in mouse pancreatic islets and clonal cells. The Ids gene was expressed in mouse islets and beta- and alpha-clonal cells, in which it was localized intracellularly in lysosomes. The transcriptional expression of Ids in mouse islets increased with glucose in a dose-dependent manner (11.5, 40.2, 88, and 179% at 5.5, 11.1, 16.7, and 24.4 mM, respectively, P < 0.01 for 16.7 and 24.4 mM glucose vs. 3 mM glucose). This increase was not produced by glyceraldehyde (1 mM) or 6-deoxyglucose (21.4 mM) and was blocked by the addition of mannoheptulose (21.4 mM). Neither insulin content nor secretory response to glucose (16.7 mM) was altered in mouse islets infected with lentiviral constructs carrying the IDS gene in sense orientation. Furthermore, no decrease in islet cell viability was observed in mouse islets carrying lentiviral contracts compared with controls. However, insulin content was reduced (35% vs. controls, P < 0.001) in islets infected with IDS antisense construct, while the secretory response of those islets to glucose was maintained. Inhibition of IDS by antisense infection led to an increase in lysosomal size and a high rate of insulin granule degradation via the crinophagic route in pancreatic beta-cells. We conclude that IDS is localized in lysosomes in pancreatic islet cells and expression is regulated by glucose. IDS has a potential role in the normal pathway of lysosomal degradation of secretory peptides and is likely to be essential to maintain pancreatic beta-cell function.