Chronic hyperglycemia contributes to pancreatic beta-cell dysfunction during the development of type 2 diabetes. Treatment of pancreatic beta-cells with prolonged high glucose concentrations has been shown to reduce insulin promoter activity and insulin gene expression. Here, we examined the effect of high glucose on endoplasmic reticulum (ER) stress pathway activation and insulin production in INS-1 832/13 pancreatic beta-cells. Treatment of cells with 25 mm glucose for 24-48 h decreased insulin mRNA and protein levels and reduced the proinsulin translation rate, which was accompanied by enhanced unfolded protein response pathway activation (XBP-1 mRNA splicing and increased phospho-eIF2alpha, CHOP, and active ATF6 levels). Overexpressing the ER chaperone GRP78 partially rescued high glucose-induced suppression of proinsulin levels and improved glucose-stimulated insulin secretion with no effect on insulin 2 mRNA levels. Under these conditions, there was little effect of GRP78 overexpression on ER stress markers. Knockdown of GRP78 expression under basal glucose conditions reduced cellular insulin levels and glucose-stimulated insulin secretion. Thus, GRP78 is essential for insulin biosynthesis, and enhancing chaperone capacity can improve beta-cell function in the presence of prolonged hyperglycemia. In contrast, overexpression of the ER chaperone and oxidoreductase protein-disulfide isomerase (PDI) reduced glucose-stimulated insulin secretion and induced ER stress resulting from the accumulation of proinsulin in the ER. These results suggest a role for both GRP78 and PDI in insulin biosynthesis, although an excess of PDI disrupts normal proinsulin processing.