Insulin resistance and pancreatic beta cell dysfunction are major contributors to the pathogenesis of diabetes. Various conditions play a role in the pathogenesis of pancreatic beta cell dysfunction and are correlated with endoplasmic reticulum (ER) stress. Pancreatic beta cells are susceptible to ER stress. Many studies have shown that increased ER stress induces pancreatic beta cell dysfunction and diabetes mellitus using genetic models of ER stress and by various stimuli. There are many reports indicating that ER stress plays an important role in the impairment of insulin biosynthesis, suggesting that reduction of ER stress could be a therapeutic target for diabetes. In this paper, we reviewed the relationship between ER stress and diabetes and how ER stress controls insulin biosynthesis.