Despite the recent explosion in surveys of cell-type heterogeneity, the mechanisms that specify and stabilize highly related cell subtypes remain poorly understood. Here, focusing initially on exploring quantitative histone mark heterogeneity, we identify two major sub-types of pancreatic β-cells (βHIand βLO). βHIand βLOcells differ in their size, morphology, cytosolic and nuclear ultrastructure, transcriptional output, epigenomes, cell surface marker, and function. Importantly, βHIand βLOcells can be FACS separated live into CD24+ (βHI) and CD24- (βLO) fractions. From an epigenetic viewpoint, βHI-cells exhibit ~4-fold higher levels of H3K27me3, more compacted chromatin, and distinct chromatin organization that associates with a specific pattern of transcriptional output. Functionally, βHIcells have increased mitochondrial mass, activity, and insulin secretion both in vivo and ex vivo. Critically, Eed and Jmjd3 loss-of-function studies demonstrate that H3K27me3 dosage is a significant regulator of βHI/ βLOcell ratio in vivo, yielding some of the first-ever specific models of β-cell sub-type distortion. βHIand βLOsub-types are conserved in humans with βHI-cells enriched in human Type-2 diabetes. These data identify two novel and fundamentally distinct β-cell subtypes and identify epigenetic dosage as a novel regulator of β-cell subtype specification and heterogeneity.