Pancreatic amyloid formation by islet amyloid polypeptide (IAPP) is a hallmark pathological feature of type 2 diabetes. IAPP is stored in the secretory granules of pancreatic beta-cells and co-secreted with insulin to maintain glucose homeostasis. IAPP is innocuous under homeostatic conditions but imbalances in production or processing of IAPP may result in homodimer formation leading to the rapid production of cytotoxic oligomers and amyloid fibrils. The consequence is beta-cell dysfunction and the accumulation of proteinaceous plaques in and around pancreatic islets. Beta-site APP-cleaving enzyme 2, BACE2, is an aspartyl protease commonly associated with BACE1, a related homolog responsible for amyloid processing in the brain and strongly implicated in Alzheimer's disease. Herein, we identify two distinct sites of the mature human IAPP sequence that are susceptible to BACE2-mediated proteolytic activity. The result of proteolysis is modulation of human IAPP fibrillation and human IAPP protein degradation. These results suggest a potential therapeutic role for BACE2 in type 2 diabetes-associated hyperamylinaemia.