BACKGROUND: Cholesterol accumulation causes pancreatic beta cell lipotoxicity and dysfunction. Cholesteryl ester transfer protein (CETP) plays an important role in blood lipid homeostasis. However, its role in tissue lipid metabolism remains unclear. We hypothesized that plasma CETP impact cholesterol homeostasis in the beta cells, thus damaging their functions. METHODS: The adipose tissue-specific CETP expression transgenic (aP2-CETPTg) mice, characterized by high CETP levels in the circulation, were used in this study. Pancreatic islet cholesterol and beta cell function were assessed in mice. We further measured mRNA levels of the genes involved in beta cell proliferation and differentiation, inflammation and cholesterol metabolism. TUNEL assay was applied to investigate beta cell apoptosis in islets. RESULTS: The aP2-CETPTg mice exhibited glucose intolerance, lower plasma insulin concentrations but increased insulin sensitivity compared with wild type mice. In addition, glucose-stimulated insulin secretion from isolated pancreatic islets significantly decreased, and free cholesterol significantly increased. Moreover, the number and size of islets from aP2-CETPTg mice were significantly decreased. Genes involved in beta cell proliferation, such as Pdx1 and BETA2, were down-regulated; genes involved in inflammation and ER stress, such as IL-1β, CHOP, and Xbp1 were up-regulated, in line with an increase of beta cell apoptosis. CONCLUSIONS: Plasma CETP causes free cholesterol accumulation in islets which could contribute to beta cell dysfunction. Thus, CETP inhibition could be a novel protective strategy for dyslipidemia related to diabetes and obese.