Mitophagy is a cellular quality-control pathway, which is essential for elimination of unhealthy mitochondria. While mitophagy is critical to pancreatic β-cell function, the posttranslational signals governing β-cell mitochondrial turnover are unknown. Here, we report that ubiquitination is essential for the assembly of a mitophagy regulatory complex, comprised of the E3 ligase Nrdp1, the deubiquitinase enzyme USP8, and Clec16a, a mediator of β-cell mitophagy with unclear function. We discover that the diabetes gene Clec16a encodes an E3 ligase, which promotes nondegradative ubiquitin conjugates to direct its mitophagy effectors and stabilize the Clec16a-Nrdp1-USP8 complex. Inhibition of the Clec16a pathway by the chemotherapeutic lenalidomide, a selective ubiquitin ligase inhibitor associated with new-onset diabetes, impairs β-cell mitophagy, oxygen consumption, and insulin secretion. Indeed, patients treated with lenalidomide develop compromised β-cell function. Moreover, the β-cell Clec16a-Nrdp1-USP8 mitophagy complex is destabilized and dysfunctional after lenalidomide treatment as well as after glucolipotoxic stress. Thus, the Clec16a-Nrdp1-USP8 complex relies on ubiquitin signals to promote mitophagy and maintain mitochondrial quality control necessary for optimal β-cell function.