ABSTRACT. Patients with schizophrenia receive medication to alleviate various symptoms, but some efficacious second generation antipsychotics, particularly olanzapine, can cause obesity, dyslipidemia, and diabetes mellitus. It has been generally considered that olanzapine contributes to the development of diabetes by inducing obesity and subsequent insulin resistance. In this study, we examined the effect of olanzapine and risperidone, another second generation antipsychotic, on a hamster pancreatic β cell line, and found that both evoked mild endoplasmic reticulum (ER) stress, as evidenced by mild activation of the ER stress sensor molecule PERK. Surprisingly, only olanzapine induced marked apoptosis. Phosphorylation of the α subunit of eukaryotic initiation factor 2, an event immediately downstream of PERK activation, was not observed in cells treated with olanzapine, protein synthesis continued despite PERK activation, and ER stress was thereby sustained. Secretion of insulin was markedly inhibited, and both proinsulin and insulin accumulated inside olanzapine-treated cells. Inhibition of protein synthesis and knockdown of insulin mRNA, which result in less unfolded protein burden, both attenuated subsequent olanzapine-induced apoptosis. Given clinical observations that some patients taking olanzapine exhibit hyperlipidemia and hyperglycemia without gaining weight, our observations suggest that damage to pancreatic β cells may contribute to the undesirable metabolic consequences of olanzapine treatment in some cases.