Aims/hypothesis Beta cell failure is caused by loss of cell mass, mostly by apoptosis, but also by simple dysfunction (decline of glucose-stimulated insulin secretion, downregulation of specific gene expression). Apoptosis and dysfunction are caused, at least in part, by lipoglucotoxicity. The mechanisms implicated are oxidative stress, increase in the hexosamine biosynthetic pathway (HBP) flux and endoplasmic reticulum (ER) stress. Oxidative stress plays a role in glucotoxicity-induced beta cell dedifferentiation, while glucotoxicity-induced ER stress has been mostly linked to beta cell apoptosis. We sought to clarify whether ER stress caused by increased HBP flux participates in a dedifferentiating response of beta cells, in the absence of relevant apoptosis. Methods We used INS-1E cells and murine islets. We analysed the unfolded protein response and the expression profile of beta cells by real-time RT-PCR and western blot. The signal transmission pathway elicited by ER stress was investigated by real-time RT-PCR and immunofluorescence. Results Glucosamine and high glucose induced ER stress, but did not decrease cell viability in INS-1E cells. ER stress caused dedifferentiation of beta cells, as shown by downregulation of beta cell markers and of the transcription factor, pancreatic and duodenal homeobox 1. Glucose-stimulated insulin secretion was inhibited. These effects were prevented by the chemical chaperone, 4-phenyl butyric acid. The extracellular signal-regulated kinase (ERK) signal transmission pathway was implicated, since its inhibition prevented the effects induced by glucosamine and high glucose. Conclusions/interpretation Glucotoxic ER stress dedifferentiates beta cells, in the absence of apoptosis, through a transcriptional response. These effects are mediated by the activation of ERK1/2.