The islet in type 2 diabetes mellitus (T2DM) is characterized by a deficit in β-cells and increased β-cell apoptosis attributable at least in part to intracellular toxic oligomers of IAPP (islet amyloid polypeptide). β-cells of individuals with T2DM are also characterized by accumulation of polyubiquitinated proteins and deficiency in the deubiquitinating enzyme UCHL1 (ubiquitin carboxyl-terminal esterase L1 [ubiquitin thiolesterase]), accounting for a dysfunctional ubiquitin/proteasome system. In the present study, we used mouse genetics to elucidate in vivo whether a partial deficit in UCHL1 enhances the vulnerability of β-cells to human-IAPP (hIAPP) toxicity, and thus accelerates diabetes onset. We further investigated whether a genetically induced deficit in UCHL1 function in β-cells exacerbates hIAPP-induced alteration of the autophagy pathway in vivo. We report that a deficit in UCHL1 accelerated the onset of diabetes in hIAPP transgenic mice, due to a decrease in β-cell mass caused by increased β-cell apoptosis. We report that UCHL1 dysfunction aggravated the hIAPP-induced defect in the autophagy/lysosomal pathway, illustrated by the marked accumulation of autophagosomes and cytoplasmic inclusions positive for SQSTM1/p62 and polyubiquitinated proteins with lysine 63-specific ubiquitin chains. Collectively, this study shows that defective UCHL1 function may be an early contributor to vulnerability of pancreatic β-cells for protein misfolding and proteotoxicity, hallmark defects in islets of T2DM. Also, given that deficiency in UCHL1 exacerbated the defective autophagy/lysosomal degradation characteristic of hIAPP proteotoxicity, we demonstrate a previously unrecognized role of UCHL1 in the function of the autophagy/lysosomal pathway in β-cells.