Type 2 diabetes mellitus (T2DM) results from pancreatic beta cell failure in the setting of insulin resistance. Heterozygous mutations in the gene encoding the beta cell transcription factor pancreatic duodenal homeobox 1 (Pdx1) are associated with both T2DM and maturity onset diabetes of the young (MODY4), and low levels of Pdx1 accompany beta cell dysfunction in experimental models of glucotoxicity and diabetes. Here, we find that Pdx1 is required for compensatory beta cell mass expansion in response to diet-induced insulin resistance through its roles in promoting beta cell survival and compensatory hypertrophy. Pdx1-deficient beta cells show evidence of endoplasmic reticulum (ER) stress both in the complex metabolic milieu of high-fat feeding as well as in the setting of acutely reduced Pdx1 expression in the Min6 mouse insulinoma cell line. Further, Pdx1 deficiency enhances beta cell susceptibility to ER stress-associated apoptosis. The results of high throughput expression microarray and chromatin occupancy analyses reveal that Pdx1 regulates a broad array of genes involved in diverse functions of the ER, including proper disulfide bond formation, protein folding, and the unfolded protein response. These findings suggest that Pdx1 deficiency leads to a failure of beta cell compensation for insulin resistance at least in part by impairing critical functions of the ER.