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Palmitoylation cycling involves successive addition and removal of lipid from proteins to regulate cell structure and membrane interactions. Cycling requires depalmitoylation, mediated mostly by the enzyme acyl-protein thioesterase 1 (APT1). To test the hypothesis that depalmitoylation is critical for normal glucose metabolism, we generated global and islet-specific (using tamoxifen-inducible Pdx1 Cre) APT1 knockout mice. Both models on a chow diet had enhanced glucose tolerance due to increased insulin secretion. Pancreatic insulin content was unaffected by APT1 deficiency. Isolated islets from APT1-deficient models demonstrated increased glucose-stimulated insulin secretion under static and dynamic conditions. Quantitative histomorphometry demonstrated β cell hypertrophy in islets from global APT1 KO mice. Calcium dynamics in isolated islets were unaffected by APT1 deficiency, suggesting that increased insulin secretion is mediated downstream of depolarization-dependent calcium influx. APT1 knockdown in replicates of human islets from two donors showed increased insulin secretion. At 4 weeks of age, global APT1 KO db/db mice had improved glucose tolerance due to increased insulin secretion compared to littermate db/db mice. However, by 16 weeks of age APT1-deficient db/db mice had severe glucose intolerance, hypoinsulinemia, and β cell atrophy compared to littermate db/db mice. Islet palmitoylation proteomics identified putative APT1 substrates including Scamp1, -2 and -3. Scamp1 was validated as a palmitoylated protein, APT1 deficiency would be predicted to impair Scamp1 function, and Scamp1 knockdown in insulinoma cells increased insulin secretion. These results suggest that deficiency of APT1, an enzyme susceptible to post-translational regulation in the setting of insulin resistance, causes hypersecretion of insulin that leads to β cell failure, modeling the clinical evolution of human type 2 diabetes. Disclosure G. Dong: None. X. Wei: None. L. Yin: None. C. Feng: None. S. Adak: None. Z.A. Shyr: None. Q. Zhang: None. S. Morikawa: None. R. Asada: None. F. Urano: Stock/Shareholder; Self; CytRx Corporation. Other Relationship; Self; AETAS Pharma, Amylyx Pharmaceuticals, Mitochon, National Center for Advancing Translational Sciences, Novus Biologicals?. M.S. Remedi: None. C.F. Semenkovich: None.