Neuronatin (Nnat) is an imprinted gene implicated in human obesity and widely expressed in neuroendocrine and metabolic tissues in a hormone and nutrient-sensitive manner. However, its molecular and cellular functions and precise role in organismal physiology remain only partly defined. Here we demonstrate that mice lacking Nnat globally or specifically in β cells display impaired glucose-stimulated insulin secretion leading to defective glucose handling under conditions of nutrient-excess. In contrast, we report no evidence for any feeding or body weight phenotypes in global Nnat null mice. At the molecular level neuronatin augments insulin signal peptide cleavage by binding to the signal peptidase complex and facilitates translocation of the nascent preprohormone. Loss of neuronatin expression in β cells therefore reduces insulin content and blunts glucose-stimulated insulin secretion. Nnat expression, in turn, is glucose-regulated. This mechanism therefore represents a novel site of nutrient-sensitive control of β cell function and whole animal glucose homeostasis. These data also suggest a potential wider role for Nnat in the regulation of metabolism through the modulation of peptide processing events.