Type 2 diabetes mellitus is a disorder of glucose homeostasis involving complex gene and environmental interactions that are incompletely understood. Mammalian homologs of nematode sex determination genes have recently been implicated in glucose homeostasis and type 2 diabetes mellitus. These are the Hedgehog receptor Patched and Calpain-10, which have homology to the nematode tra-2 and tra-3 sex determination genes, respectively. Here, we have developed Fem1b knockout (Fem1b-KO) mice, with targeted inactivation of Fem1b, a homolog of the nematode fem-1 sex determination gene. We show that the Fem1b-KO mice display abnormal glucose tolerance and that this is due predominantly to defective glucose-stimulated insulin secretion. Arginine-stimulated insulin secretion is also affected. The Fem1b gene is expressed in pancreatic islets, within both beta cells and non-beta cells, and is highly expressed in INS-1E cells, a pancreatic beta-cell line. In conclusion, these data implicate Fem1b in pancreatic islet function and insulin secretion, strengthening evidence that a genetic pathway homologous to nematode sex determination may be involved in glucose homeostasis and suggesting novel genes and processes as potential candidates in the pathogenesis of diabetes mellitus.