AbstractImpaired proinsulin-to-insulin processing in pancreatic β-cells is a key defective step in both type 1 diabetes and type 2 diabetes (T2D) (refs. ^1,2), but the mechanisms involved remain to be defined. Altered metabolism of sphingolipids (SLs) has been linked to development of obesity, type 1 diabetes and T2D (refs. ^3–8); nonetheless, the role of specific SL species in β-cell function and demise is unclear. Here we define the lipid signature of T2D-associated β-cell failure, including an imbalance of specific very-long-chain SLs and long-chain SLs. β-cell-specific ablation of CerS2, the enzyme necessary for generation of very-long-chain SLs, selectively reduces insulin content, impairs insulin secretion and disturbs systemic glucose tolerance in multiple complementary models. In contrast, ablation of long-chain-SL-synthesizing enzymes has no effect on insulin content. By quantitatively defining the SL–protein interactome, we reveal that CerS2 ablation affects SL binding to several endoplasmic reticulum–Golgi transport proteins, including Tmed2, which we define as an endogenous regulator of the essential proinsulin processing enzyme Pcsk1. Our study uncovers roles for specific SL subtypes and SL-binding proteins in β-cell function and T2D-associated β-cell failure.