Recent work has renewed interest in therapies targeting the renin-angiotensin system (RAS) to improve β-cell function in type 2 diabetes. Studies show that generation of angiotensin-(1–7) by ACE2 and its binding to the Mas receptor (MasR) improves glucose homeostasis, partly by enhancing glucose-stimulated insulin secretion (GSIS). Thus, islet ACE2 upregulation is viewed as a desirable therapeutic goal. Here, we show that, although endogenous islet ACE2 expression is sparse, its inhibition abrogates angiotensin-(1–7)–mediated GSIS. However, a more widely expressed islet peptidase, neprilysin, degrades angiotensin-(1–7) into several peptides. In neprilysin-deficient mouse islets, angiotensin-(1–7) and neprilysin-derived degradation products angiotensin-(1–4), angiotensin-(5–7), and angiotensin-(3–4) failed to enhance GSIS. Conversely, angiotensin-(1–2) enhanced GSIS in both neprilysin-deficient and wild-type islets. Rather than mediating this effect via activation of the G-protein–coupled receptor (GPCR) MasR, angiotensin-(1–2) was found to signal via another GPCR, namely GPCR family C group 6 member A (GPRC6A). In conclusion, in islets, intact angiotensin-(1–7) is not the primary mediator of beneficial effects ascribed to the ACE2/angiotensin-(1–7)/MasR axis. Our findings warrant caution for the concurrent use of angiotensin-(1–7) compounds and neprilysin inhibitors as therapies for diabetes.