Pancreatic-derived factor (PANDER) is a cytokine-like protein that is highly expressed in pancreatic islets. In vitro, PANDER pretreatment or viral-mediated overexpression promotes apoptosis of islet β cells. Under conditions of insulin resistance, chronic hyperglycemia potently activates PANDER expression and stimulates the cosecretion of insulin and PANDER in β cells. PANDER binds to the liver cell membrane and induces insulin resistance, resulting in increased gluconeogenesis. Recently, PANDER was found to be expressed in rodent and human liver, and its expression is increased in the liver of diabetic mice and rats. Hepatic overexpression of PANDER promotes lipogenesis in the liver and induces insulin resistance in C57BL/6 mice, whereas the inactivation of hepatic PANDER markedly reduces steatosis, insulin resistance, and hyperglycemia in db/db mice. PANDER deficiency protects mice from high-fat-diet-induced hyperglycemia by decreasing gluconeogenesis in the liver. In summary, PANDER plays an important role in the progression of type 2 diabetes by negatively regulating islet β-cell function and insulin sensitivity in the liver.