Objective Carbohydrate-response element-binding protein (ChREBP) is the major transcription factor conferring glucose-induced gene expression in pancreatic islets, liver and adipose tissue. Recently, a novel ChREBP isoform, ChREBP-β, was identified in adipose tissue and found to be also expressed in islets and involved in glucose-induced beta cell proliferation. However, the physiological function of this less abundant β-isoform in the islet, and in diabetes, is largely unknown. The aims of the present study, therefore, were to determine how diabetes affects ChREBP-β and elucidate its physiological role in pancreatic beta cells. Methods Non-obese diabetic and obese, diabetic ob/ob mice were used as models of T1D and T2D and human islets and the rat INS-1 beta cell line were exposed to low/high glucose and used for ChREBP isoform-specific gain-and-loss-of-function experiments. Changes in ChREBP-β and ChREBP-α were assessed by qRT-PCR, immunoblotting, promoter luciferase, and chromatin immunoprecipitation studies. Results Expression of the ChREBP-β isoform was highly induced in diabetes and by glucose, whereas ChREBP-α was downregulated. Interestingly, ChREBP-β gain-of-function experiments further revealed that it was ChREBP-β that downregulated ChREBP-α through a negative feedback loop. On the other hand, ChREBP-β knockdown led to unabated ChREBP-α activity and glucose-induced expression of target genes, suggesting that one of the physiological roles of this novel β-isoform is to help keep glucose-induced and ChREBP-α-mediated gene expression under control. Conclusions We have identified a previously unappreciated negative feedback loop by which glucose-induced ChREBP-β downregulates ChREBP-α-signaling providing new insight into the physiological role of islet ChREBP-β and into the regulation of glucose-induced gene expression.