Expanding β cell mass is a critical goal in the fight against diabetes. CDK4, an extensively characterized cell cycle activator, is required to establish and maintain β cell number. β cell failure in the IRS2-deletion mouse type 2 diabetes model is, in part, due to loss of CDK4 regulator cyclin D2. We set out to determine whether replacement of endogenous CDK4 with the inhibitor-resistant mutant CDK4-R24C rescued the loss of β cell mass in IRS2-deficient mice. Surprisingly, not only β cell mass but also β cell dedifferentiation was effectively rescued, despite no improvement in whole body insulin sensitivity. Ex vivo studies in primary islet cells revealed a mechanism in which CDK4 intervened downstream in the insulin signaling pathway to prevent FOXO1-mediated transcriptional repression of critical β cell transcription factor Pdx1. FOXO1 inhibition was not related to E2F1 activity, to FOXO1 phosphorylation, or even to FOXO1 subcellular localization, but rather was related to deacetylation and reduced FOXO1 abundance. Taken together, these results demonstrate a differentiation-promoting activity of the classical cell cycle activator CDK4 and support the concept that β cell mass can be expanded without compromising function.