Corticosterone (CORT) and other glucocorticoids cause peripheral insulin resistance and compensatory increases in β-cell mass. A prolonged high-fat diet (HFD) induces insulin resistance and impairs β-cell insulin secretion. This study examined islet adaptive capacity in rats treated with CORT and a HFD. Male Sprague-Dawley rats (age ∼6 weeks) were given exogenous CORT (400 mg/rat) or wax (placebo) implants and placed on a HFD (60% calories from fat) or standard diet (SD) for 2 weeks (N = 10 per group). CORT-HFD rats developed fasting hyperglycemia (>11 mM) and hyperinsulinemia (∼5-fold higher than controls) and were 15-fold more insulin resistant than placebo-SD rats by the end of ∼2 weeks (Homeostatic Model Assessment for Insulin Resistance [HOMA-IR] levels, 15.08 ± 1.64 vs 1.0 ± 0.12, P < .05). Pancreatic β-cell function, as measured by HOMA-β, was lower in the CORT-HFD group as compared to the CORT-SD group (1.64 ± 0.22 vs 3.72 ± 0.64, P < .001) as well as acute insulin response (0.25 ± 0.22 vs 1.68 ± 0.41, P < .05). Moreover, β- and α-cell mass were 2.6- and 1.6-fold higher, respectively, in CORT-HFD animals compared to controls (both P < .05). CORT treatment increased p-protein kinase C-α content in SD but not HFD-fed rats, suggesting that a HFD may lower insulin secretory capacity via impaired glucose sensing. Isolated islets from CORT-HFD animals secreted more insulin in both low and high glucose conditions; however, total insulin content was relatively depleted after glucose challenge. Thus, CORT and HFD, synergistically not independently, act to promote severe insulin resistance, which overwhelms islet adaptive capacity, thereby resulting in overt hyperglycemia.