Fine-tuning of insulin release from pancreatic β-cells is essential to maintain blood glucose homeostasis. Here, we report that insulin secretion is regulated by a circular RNA containing the lariat sequence of the second intron of the insulin gene. Silencing of this intronic circular RNA in pancreatic islets leads to a decrease in the expression of key components of the secretory machinery of β-cells, resulting in impaired glucose- or KCl-induced insulin release and calcium signaling. The effect of the circular RNA is exerted at the transcriptional level and involves an interaction with the RNA-binding protein TAR DNA-binding protein 43 kDa (TDP-43). The level of this circularized intron is reduced in the islets of rodent diabetes models and of type 2 diabetic patients, possibly explaining their impaired secretory capacity. The study of this and other circular RNAs helps understanding β-cell dysfunction under diabetes conditions, and the etiology of this common metabolic disorder.