Commensal flora and pathogenic microbes influence the incidence of diabetes in animal models yet little is known about the mechanistic basis of these interactions. We hypothesized that Myd88, an adaptor molecule in the Toll-like-receptor (TLR) pathway, regulates pancreatic beta-cell function and homeostasis. We first examined beta-cells histologically and found that Myd88-/- mice have smaller islets in comparison to C57Bl/6 controls. Myd88-/- mice were nonetheless normoglycemic both at rest and after an intra-peritoneal glucose tolerance test (IPGTT). In contrast, after low-dose streptozotocin (STZ) challenge, Myd88-/-mice had an abnormal IPGTT relative to WT controls. Furthermore, Myd88-/- mice suffer enhanced beta-cell apoptosis and have enhanced hepatic damage with delayed recovery upon low-dose STZ treatment. Finally, we treated WT mice with broad-spectrum oral antibiotics to deplete their commensal flora. In WT mice, low dose oral lipopolysaccharide, but not lipotichoic acid or antibiotics alone, strongly promoted enhanced glycemic control. These data suggest that Myd88 signaling and certain TLR ligands mediate a homeostatic effect on beta-cells primarily in the setting of injury.