Uncoupling protein 2 (UCP2), a mitochondrial protein, is known to be upregulated in pancreatic islets of patients with type 2 diabetes (T2DM); however, the pathological significance of this increase in UCP2 expression is unclear. In this study, we highlight the molecular link between the increase in UCP2 expression in β-cells and β-cell failure by using genetically engineered mice and human islets. β-cell-specific UCP2-overexpressing transgenic mice (βUCP2Tg) exhibited glucose intolerance and a reduction in insulin secretion. Decreased mitochondrial function and increased aldolase B (AldB) expression through oxidative-stress-mediated pathway were observed in βUCP2Tg islets. AldB, a glycolytic enzyme, was associated with reduced insulin secretion via mitochondrial dysfunction and impaired calcium release from the endoplasmic reticulum (ER). Taken together, our findings provide a new mechanism of β-cell dysfunction by UCP2 and AldB. Targeting the UCP2/AldB axis is a promising approach for the recovery of β-cell function.