Aims/hypothesis A contributor to beta cell failure in type 2 diabetes and islet transplants is amyloid formation by aggregation of the beta cell peptide, islet amyloid polypeptide (IAPP). Similar to the proinsulin processing pathway that generates insulin, IAPP is derived from a prohormone precursor, proIAPP, which requires cleavage by prohormone convertase (PC) 1/3 and PC2 in rodent pancreatic beta cells. We hypothesised that loss of PC2 would promote beta cell death and dysfunction in a rodent model of human beta cell proIAPP overexpression. Methods We generated an islet transplant model wherein immune-deficient mouse models of diabetes received islets expressing amyloidogenic human proIAPP and lacking PC2, leading to restoration of normoglycaemia accompanied by increased secretion of human proIAPP. Blood glucose levels were analysed for up to 16 weeks in transplant recipients and grafts were assessed for islet amyloid and beta cell number and death. Results Hyperglycaemia (blood glucose >16.9 mmol/l) returned in 94% of recipients of islets expressing human proIAPP and lacking PC2, whereas recipients of islets that express human proIAPP and normal PC2 levels remained normoglycaemic for at least 16 weeks. Islet graft failure was accompanied by a ∼20% reduction in insulin-positive cells, yet the degree of amyloid deposition and beta cell apoptosis was similar to those of controls expressing human proIAPP with functional PC2 levels. Conclusions/interpretation PC2 deficiency in transplanted mouse islets expressing human proIAPP promotes beta cell loss and graft failure. Our data suggest that impaired NH 2 -terminal processing and increased secretion of human proIAPP promote beta cell failure.