Store-operated Ca²⁺ entry (SOCE) is a dynamic process that leads to refilling of endoplasmic reticulum (ER) Ca²⁺ stores through reversible gating of plasma membrane Ca²⁺ channels by the ER Ca²⁺ sensor Stromal Interaction Molecule 1 (STIM1). Pathogenic reductions in β-cell ER Ca²⁺ have been observed in diabetes. However, a role for impaired SOCE in this phenotype has not been tested. We measured the expression of SOCE molecular components in human and rodent models of diabetes and found a specific reduction in STIM1 mRNA and protein levels in human islets from donors with type 2 diabetes (T2D), islets from hyperglycemic streptozotocin-treated mice, and INS-1 cells (rat insulinoma cells) treated with proinflammatory cytokines and palmitate. Pharmacologic SOCE inhibitors led to impaired islet Ca²⁺ oscillations and insulin secretion, and these effects were phenocopied by β-cell STIM1 deletion. STIM1 deletion also led to reduced ER Ca²⁺ storage and increased ER stress, whereas STIM1 gain of function rescued β-cell survival under proinflammatory conditions and improved insulin secretion in human islets from donors with T2D. Taken together, these data suggest that the loss of STIM1 and impaired SOCE contribute to ER Ca²⁺ dyshomeostasis under diabetic conditions, whereas efforts to restore SOCE-mediated Ca²⁺ transients may have the potential to improve β-cell health and function.