Restoration of the functional potency of pancreatic islets either through enhanced proliferation (hyperplasia) or increase in size (hypertrophy) of beta cells is a major objective for intervention in diabetes. We have obtained experimental evidence that global knock-out of a small, single-span regulatory subunit of Na,K-ATPase, FXYD2, alters glucose control. Adult Fxyd2(-/-) mice showed significantly lower blood glucose levels, no signs of peripheral insulin resistance, and improved glucose tolerance compared with their littermate controls. Strikingly, there was a substantial hyperplasia in pancreatic beta cells from the Fxyd2(-/-) mice compared with the wild type littermates, compatible with an observed increase in the level of circulating insulin. No changes were seen in the exocrine compartment of the pancreas, and the mice had only a mild, well-adapted renal phenotype. Morphometric analysis revealed an increase in beta cell mass in KO compared with WT mice. This appears to explain a phenotype of hyperinsulinemia. By RT-PCR, Western blot, and immunocytochemistry we showed the FXYD2b splice variant in pancreatic beta cells from wild type mice. Phosphorylation of Akt kinase was significantly higher under basal conditions in freshly isolated islets from Fxyd2(-/-) mice compared with their WT littermates. Inducible expression of FXYD2 in INS 832/13 cells produced a reduction in the phosphorylation level of Akt, and phosphorylation was restored in parallel with degradation of FXYD2. Thus we suggest that in pancreatic beta cells FXYD2 plays a role in Akt signaling pathways associated with cell growth and proliferation.