In Wolfram syndrome, a rare form of juvenile diabetes, pancreatic ss-cell death is not accompanied by an autoimmune response. Although it has been reported that mutations in the WFS1 gene are responsible for the development of this syndrome, the precise molecular mechanisms underlying ss-cell death caused by the WFS1 mutations remain unknown. Here we report that WFS1 is a novel component of the unfolded protein response and has an important function in maintaining homeostasis of the endoplasmic reticulum (ER) in pancreatic ss-cells. WFS1 encodes a transmembrane glycoprotein in the ER. WFS1 mRNA and protein are induced by ER stress. The expression of WFS1 is regulated by IRE1 and PERK, central regulators of the unfolded protein response. WFS1 is normally upregulated during insulin secretion, whereas inactivation of WFS1 in ss-cells causes ER stress and ss-cell dysfunction. These results indicate that the pathogenesis of Wolfram syndrome involves chronic ER stress in pancreatic ss-cells caused by the loss of function of WFS1.