Adaptive β-cell replication occurs in response to increased metabolic demand during insulin resistance. The intracellular mediators of this compensatory response are poorly defined and their identification could provide significant targets for β-cell regeneration therapies. Here we show that glucose and insulin in vitro and insulin resistance in vivo activate protein kinase C ζ (PKCζ) in pancreatic islets and β-cells. PKCζ is required for glucose- and glucokinase activator-induced proliferation of rodent and human β-cells in vitro. Furthermore, either kinase-dead PKCζ expression (KD-PKCζ) or disruption of PKCζ in mouse β-cells blocks compensatory β-cell replication when acute hyperglycemia/hyperinsulinemia is induced. Importantly, KD-PKCζ inhibits insulin resistance-mediated mammalian target of rapamycin (mTOR) activation and cyclin-D2 upregulation independent of Akt activation. In summary, PKCζ activation is key for early compensatory β-cell replication in insulin resistance by regulating the downstream signals mTOR and cyclin-D2. This suggests that alterations in PKCζ expression or activity might contribute to inadequate β-cell mass expansion and β-cell failure leading to type 2 diabetes.