Type 2 diabetes is characterized by the inability of pancreatic β-cells to secrete sufficient functional insulin to control blood glucose in the face of the increased insulin resistance associated with obesity. β-cell dysfunction is accompanied by adverse cellular responses to high concentrations of lipids and glucose, oxidative stress, endoplasmic reticulum (ER) stress and local inflammation, although the relative contribution of these inter-related factors to diabetes pathology has remained unclear. The IL-22 cytokine boosts barrier function and wound repair in the skin and mucosae, however its receptor (IL-22R1) is most highly expressed by islet secretory cells. In murine β-cells and islets, and human islets, IL-22 down-regulates pro-oxidant genes and up-regulates anti-oxidant genes, providing protection from oxidative stress and ER stress induced by high glucose, free fatty acids and inflammatory cytokines. IL-22R1 neutralising antibodies induce oxidative and ER stress in healthy islets, demonstrating that IL-22-IL-22R1 signalling maintains islet homeostasis. Islets from mice with high fat diet-induced obesity show immune activation, chronic ER stress and hypersecretion of insulin. Ex vivo exposure to IL-22 suppresses ER stress and chemokine production, and reduces glucose-stimulated insulin secretion. Obese mice treated with IL-22 showed normalised random fed blood glucose within 7 days and normal glucose tolerance and fasting insulin by 2 weeks, at which time insulin resistance was unchanged. However, after 4 weeks treatment serum proinsulin returned to normal levels and insulin sensitivity was restored. IL-22-treated mice also lost weight and showed redistribution of adipose tissue, with increased epididymal and brown fat. Islets from IL-22-treated obese mice showed greatly reduced proinsulin secretion and near complete suppression of ER stress and inflammation. Taken together these data suggest that IL-22 is a natural regulator of β-cell insulin biosynthesis and secretion, protecting the β-cell from stress, preventing hypersecretion of poor quality insulin, and suppressing innate islet inflammation.