Cellular homeostasis requires intrinsic sensing mechanisms to temper function in the face of prolonged activity. In the pancreatic β-cell, glucose is likely a physiological trigger that activates an adaptive response to stimulation, thereby maintaining cellular homeostasis. Immediate early genes (IEGs) are activated as a first line of defense in cellular homeostasis and are largely responsible for transmitting an environmental cue to a cellular response. Here we examine the regulation and function of the novel β-cell IEG, neuronal PAS domain protein 4 (Npas4). Using MIN6 cells, mouse and human islets, as well as in vivo infusions, we demonstrate that Npas4 is expressed within pancreatic islets and is upregulated by β-cell depolarizing agents. Npas4 tempers β-cell function through a direct inhibitory interaction with the insulin promoter and by blocking the potentiating effects of GLP-1 without significantly reducing glucose-stimulated secretion. Finally, Npas4 expression is induced by classical endoplasmic reticulum (ER) stressors and can prevent thapsigargin- and palmitate-induced dysfunction and cell death. These results suggest that Npas4 is a key activity-dependent regulator that improves β-cell efficiency in the face of stress. We posit that Npas4 could be a novel therapeutic target in type 2 diabetes that could both reduce ER stress and cell death and maintain basal cell function.