Type 2 diabetes mellitus is thought to be partially associated with endoplasmic reticulum (ER) stress toxicity on pancreatic beta cells and the result of decreased insulin synthesis and secretion. In this study, we showed that a well-known insulin sensitizer, metformin, directly protects against dysfunction and death of ER stress-induced NIT-1 cells (a mouse pancreatic beta cell line) via AMP-activated protein kinase (AMPK) and phosphatidylinositol-3 (PI3) kinase activation. We also showed that exposure of NIT-1 cells to metformin (5mM) increases cellular resistance against ER stress-induced NIT-1 cell dysfunction and death. AMPK and PI3 kinase inhibitors abolished the effect of metformin on cell function and death. Metformin-mediated protective effects on ER stress-induced apoptosis were not a result of an unfolded protein response or the induced inhibitors of apoptotic proteins. In addition, we showed that exposure of ER stressed-induced NIT-1 cells to metformin decreases the phosphorylation of c-Jun NH(2) terminal kinase (JNK). These data suggest that metformin is an important determinant of ER stress-induced apoptosis in NIT-1 cells and may have implications for ER stress-mediated pancreatic beta cell destruction via regulation of the AMPK-PI3 kinase-JNK pathway.