The metabolic syndrome is associated with an increase in the activation of renin angiotensin system (RAS) and inhibition of RAS reduces the incidence of new onset diabetes 1. Importantly, angiotensin II, independently of its vasoconstrictor action, causes β-cell inflammation and dysfunction and this may be an early step in the development of type-2 diabetes2. We show that angiotensin II exposure causes ER stress, increases mRNA expression of the pro-inflammatory cytokines IL-1β and TNF-α, and β-cell dysfunction in murine islets of Langerhans both in vivo and ex vivo and that all these effects are significantly ameliorated by TUDCA, an inhibitor of ER stress. In addition, we show that angiotensin II also causes ER stress and inflammation in clonal β-cells and provide evidence that these effects are mediated by the activation of the angiotensin II type-1 and IP3 receptors, and that inflammation requires the activation of PERK. In summary, these data reveal that the induction of ER stress is critical for angiotensin II induced β-cell dysfunction and thus provides another important rationale for the use of therapies that promote ER homeostasis in the treatment of type-2 diabetes.