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Chronic inflammation promotes pancreatic β-cell decompensation to insulin resistance due to local accumulation of supraphysiologic IL-1β levels. However, the underlying molecular mechanism(s) remains elusive. We show that miR-503, exclusively induced in islets from type 2 diabetic humans and rodents, is specifically upregulated by IL-1β in β cells. β-cell–specific miR-503 transgenic (miR-503TG) mice display expression-dependent mild diabetes, severe diabetes, and premature death due to inflammation-induced multiple organ failure. By contrast, deletion of the miR-503 cluster protects mice from high-fat-diet–induced insulin resistance. Single-cell RNA sequencing indicates infiltration of immune cells and senescent β cells in miR-503TG islets. Exosomes containing miR-503 localize in insulin granules of senescent β cells. Autocrine miR-503 activates MAPKs to inhibit β-cell function and replication. Telecrine miR-503 targets Insr/Igf1r to dampen insulin signals in liver and adipose tissues. A metaflammation-related and inflammaging-related miR-503 expression may therefore induce type 2 diabetes via insulin resistance and β-cell dysfunction.