Insufficient pancreatic β-cell mass or insulin-producing β-cells are implicated in all forms of diabetes mellitus. However, the molecular mechanisms underlying β-cell destruction are complex and not fully defined. Here we observed that activation of STAT3 is intensely and specifically inhibited in β-cells under hyperglycemic conditions. By knocking out STAT3 specifically in mouse β-cells, we found that the loss of STAT3 sensitized mice to three low doses of STZ stimulation resulting in hyperglycemia. Mechanistically, accumulating PTEN, induced by STAT3 deficiency, directly represses phosphorylation of AKT, which negatively modulates transcription factor activation, dysregulates β-cell function, positively promotes apoptotic signaling, and finally induces β-cell apoptosis. Notably, the defective secretion of insulin and β-cells apoptosis was completely rescued by PTEN ablation in STAT3-null islets or PTEN inhibitor bpv(phen) treatment. Thus our data suggest that STAT3 is a vital modulator of β-cell survival and function, highlighting a critical role for STAT3 in the negative regulation of PTEN-AKT signaling pathway associated with β-cell dysfunction and apoptosis.