A hallmark of type 2 diabetes mellitus (T2DM) is the development of pancreatic β cell failure, which results in insulinopenia and hyperglycemia. We show that the adipokine adipsin has a beneficial role in maintaining β cell function. Animals genetically lacking adipsin have glucose intolerance due to insulinopenia; isolated islets from these mice have reduced glucose-stimulated insulin secretion. Replenishment of adipsin to diabetic mice treated hyperglycemia by boosting insulin secretion. We identify C3a, a peptide generated by adipsin, as a potent insulin secretagogue and show that the C3a receptor is required for these beneficial effects of adipsin. C3a acts on islets by augmenting ATP levels, respiration, and cytosolic free Ca2+. Finally, we demonstrate that T2DM patients with β cell failure are deficient in adipsin. These findings indicate that the adipsin/C3a pathway connects adipocyte function to β cell physiology, and manipulation of this molecular switch may serve as a therapy in T2DM.