Chronic ethanol consumption is known as an independent risk factor for type 2 diabetes, which is characterized by impaired glucose homeostasis and insulin resistance; however, there is a great deal of controversy concerning the relationships between alcohol consumption and the development of type 2 diabetes. We investigated the effects of chronic ethanol consumption on pancreatic β-cell dysfunction and whether generated peroxynitrite participates in the impaired glucose homeostasis. Here we show that chronic ethanol feeding decreases the ability of pancreatic β-cells to mediate insulin secretion and ATP production in coordination with the decrease of glucokinase, Glut2, and insulin expression. Specific blockade of ATF3 using siRNA or C-terminally deleted ATF3(ΔC) attenuated ethanol-induced pancreatic β-cell apoptosis or dysfunction and restored the down-regulation of glucokinase (GCK), insulin, and pancreatic duodenal homeobox-1 induced by ethanol. GCK inactivation and down-regulation were predominantly mediated by ethanol metabolism-generated peroxynitrite, which were suppressed by the peroxynitrite scavengers N(γ)-monomethyl-L-arginine, uric acid, and deferoxamine but not by the S-nitrosylation inhibitor DTT, indicating that tyrosine nitration is the predominant modification associated with GCK down-regulation and inactivation rather than S-nitrosylation of cysteine. Tyrosine nitration of GCK prevented its association with pBad, and GCK translocation into the mitochondria results in subsequent proteasomal degradation of GCK following ubiquitination. This study identified a novel and efficient pathway by which chronic ethanol consumption may induce GCK down-regulation and inactivation by inducing tyrosine nitration of GCK, resulting in pancreatic β-cell apoptosis and dysfunction. Peroxynitrite-induced ATF3 may also serve as a potent upstream regulator of GCK down-regulation and β-cell apoptosis.