Uncoupling protein-2 (UCP2) regulates insulin secretion by controlling ATP levels in beta-cells. Although UCP2 deficiency improves glycemic control in mice, increased expression of UCP2 interferes with glucose-stimulated insulin secretion. These observations link UCP2 to beta-cell dysfunction in type 2 diabetes with a perplexing evolutionary role. We found higher residual serum insulin levels and blunted lipid metabolic responses in fasted ucp2(-/-) mice, supporting the concept that UCP2 evolved to suppress insulin effects and to accommodate the fuel switch to fatty acids during starvation. In the absence of UCP2, fasting initially promotes peripheral lipolysis and hepatic fat accumulation at less than expected rates but culminates in protracted steatosis, indicating diminished hepatic utilization and clearance of fatty acids. We conclude that UCP2-mediated control of insulin secretion is a physiologically relevant mechanism of the metabolic response to fasting.