Accumulating evidence suggests that viruses play an important role in the development of diabetes. Although the diabetogenic encephalomyocarditis strain D virus induces diabetes in restricted lines of inbred mice, the susceptibility genes to virus-induced diabetes have not been identified. We report here that novel Tyrosine kinase 2 (Tyk2) gene mutations are present in virus-induced diabetes-sensitive SJL and SWR mice. Mice carrying the mutant Tyk2 gene on the virus-resistant C57BL/6 background are highly sensitive to virus-induced diabetes. Tyk2 gene expression is strongly reduced in Tyk2-mutant mice, associated with low Tyk2 promoter activity, and leads to decreased expression of interferon-inducible genes, resulting in significantly compromised antiviral response. Tyk2-mutant pancreatic β-cells are unresponsive even to high dose of Type I interferon. Reversal of virus-induced diabetes could be achieved by β-cell-specific Tyk2 gene expression. Thus, reduced Tyk2 gene expression in pancreatic β-cells due to natural mutation is responsible for susceptibility to virus-induced diabetes.