Type 2 diabetes (T2D) is a growing cause of poor health, psychosocial burden, and economic costs worldwide. The pancreatic β-cell is a cornerstone of metabolic physiology. Insulin deficiency leads to hyperglycemia, which was fatal before the availability of therapeutic insulins; even partial deficiency of insulin leads to diabetes in the context of insulin resistance. Comprising only an estimated 1 g or <1/500th of a percent of the human body mass, pancreatic β-cells of the islets of Langerhans are a vulnerable link in metabolism. Proinsulin production constitutes a major load on β-cell endoplasmic reticulum (ER), and decompensated ER stress is a cause of β-cell failure and loss in both type 1 diabetes (T1D) and T2D. The unfolded protein response (UPR), the principal ER stress response system, is critical for maintenance of β-cell health. Successful UPR guides expansion of ER protein folding capacity and increased β-cell number through survival pathways and cell replication. However, in some cases the ER stress response can cause collateral β-cell damage and may even contribute to diabetes pathogenesis. Here we review the known beneficial and harmful effects of UPR pathways in pancreatic β-cells. Improved understanding of this stress response tipping point may lead to approaches to maintain β-cell health and function.