Human IGF binding protein-3 (hIGFBP-3) overexpression in mice causes hyperglycemia, but its effect on β-cell function is unknown. We compared wild-type mice with mice overexpressing hIGFBP-3 [phoshoglycerate kinase (PGK)BP3] and mutant (Gly⁵⁶/Gly⁸⁰/Gly⁸¹)hIGFBP-3 devoid of IGF binding affinity (PGKmBP3). Intraperitoneal glucose and insulin tolerance tests were performed, and glucose, IGFBP-3, IGF-I, and insulin were determined. Pancreatic sections were used for islet histomorphometry and stained with antibodies against insulin, glucagon, and hIGFBP-3. Pancreatic islets were isolated to determine the expression of IGFBP-3, and glucose-stimulated insulin secretion was measured using both islet batch incubation and perifusion. IGFBP-3 was expressed in β-cells but not in other islet cell types. Fasting glucose concentration was elevated in PGKBP3 mice (6.27 ± 0.31 mm) compared with PGKmBP3 mice (3.98 ± 0.36 mm) and wild-type mice (4.84 ± 0.07 mm). During glucose tolerance test, glucose declined more slowly in PGKBP3 and PGKmBP3 mice than in wild-type mice, and insulin secretion was impaired in PGKBP3 mice. During insulin tolerance test, insulin declined more slowly in both transgenic mice compared with wild-type mice. Insulin secretion in islets incubated with 3.3 mm glucose was similar among groups, but islet insulin response to 16.7 mm glucose alone, or with carbachol and cAMP enhancers, was reduced in PGKBP3 and PGKmBP3 mice compared with wild-type controls. ATP content, Akt phosphorylation, and phosphoglucose isomerase activity were reduced in islets from both transgenic mice. Thus, overexpression of hIGFBP-3 in mice delays in vivo insulin clearance and reduces glucose-stimulated insulin secretion in pancreatic islets by both IGF-dependent and IGF-independent mechanisms.