The pleckstrin homology domain-interacting protein (PHIP) was originally identified as a 902-amino-acid (aa) protein that regulates insulin receptor-stimulated GLUT4 translocation in skeletal-muscle cells. Immunoblotting and immunohistological analyses of pancreatic beta-cells reveal prominent expression of a 206-kDa PHIP isoform restricted to the nucleus. Herein, we report the cloning of this larger, 1,821-aa isoform of PHIP (PHIP1), which represents a novel WD40 repeat-containing protein. We demonstrate that PHIP1 overexpression stimulates insulin-like growth factor 1-dependent and -independent proliferation of beta-cells, an event which correlates with transcriptional upregulation of the cyclin D2 promoter and the accumulation of cyclin D2 protein. RNA interference knockdown of PHIP1 in INS-1 cells abrogates insulin receptor substrate 2 (IRS2)-mediated DNA synthesis, providing for a specific role for PHIP1 in the enhancement of IRS2-dependent signaling responses leading to beta-cell growth. Finally, we provide evidence that PHIP1 overexpression blocks free fatty acid-induced apoptosis in INS-1 cells, which is accompanied by marked activation of phosphoprotein kinase B (PKB)/AKT and the concomitant inhibition of caspase-9 and caspase-3 cleavage. Our finding that the restorative effect of PHIP1 on beta-cell lipotoxicity can be attenuated by the overexpression of dominant-negative PKB suggests a key role for PKB in PHIP1-mediated cytoprotection. Taken together, these findings provide strong support for PHIP1 as a novel positive regulator of beta-cell function. We suggest that PHIP1 may be involved in the induction of long-term gene expression programs to promote beta-cell mitogenesis and survival.