Diabetes is a global health problem caused primarily by the inability of pancreatic beta-cells to secrete adequate levels of insulin. The molecular mechanisms underlying the progressive failure of beta-cells to respond to glucose in type-2 diabetes remain unresolved. Using a combination of transcriptomics and proteomics, we find significant dysregulation of major metabolic pathways in islets of diabetic beta V59M mice, a non-obese, eulipidaemic diabetes model. Multiple genes/proteins involved in glycolysis/gluconeogenesis are upregulated, whereas those involved in oxidative phosphorylation are downregulated. In isolated islets, glucose-induced increases in NADH and ATP are impaired and both oxidative and glycolytic glucose metabolism are reduced. INS-1 beta-cells cultured chronically at high glucose show similar changes in protein expression and reduced glucose-stimulated oxygen consumption: targeted metabolomics reveals impaired metabolism. These data indicate hyperglycaemia induces metabolic changes in beta-cells that markedly reduce mitochondrial metabolism and ATP synthesis. We propose this underlies the progressive failure of beta-cells in diabetes.