Dysfunction of β-cell is one of major characteristics in the pathogenesis of type 2 diabetes. The combination of obesity and type 2 diabetes, characterized as 'diabesity', is associated with elevated plasma free fatty acids (FFAs). Oxidative stress has been implicated in the pathogenesis of FFA-induced β-cell dysfunction. However, molecular mechanisms linking between reactive oxygen species (ROS) and FFA-induced β-cell dysfunction and apoptosis are less clear. In the present study, we test the hypothesis that NOX2-derived ROS may play a critical role in dysfunction and apoptosis of β-cells induced by FFA. Our results show that palmitate and oleate (0.5 mmol/L, 48 h) induced JNK activation and AKT inhibition which resulted in decreased phosphorylation of FOXO1 following nuclear localization and the nucleocytoplasmic translocation of PDX-1, leading to the reducing of insulin and ultimately dysfunction of pancreatic NIT-1 cells. We also found that palmitate and oleate stimulated apoptosis of NIT-1 cells through p38MAPK, p53 and NF-κB pathway. More interestingly, our data suggest that suppression of NOX2 may restore FFA-induced dysfunction and apoptosis of NIT-1 cells. Our findings provide a new insight of the NOX2 as a potential new therapeutic target for preservation of β-cell mass and function.