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The International Diabetes Federation predicts that by 2045 the number of individuals afflicted with diabetes will increase to 629 million. Furthermore, ˜352 million individuals with impaired glucose tolerance are at increased risk for developing diabetes. Several mechanisms have been proposed for the onset of metabolic dysfunction and demise of the islet β-cell leading to the pathogenesis of diabetes. It is widely accepted that the onset of type 2 diabetes is due to an intricate interplay between genetic expression of the disease and a multitude of factors including increased oxidative and endoplasmic reticulum stress consequential to glucolipotoxicity and inflammation. Compelling experimental evidence from in vitro and in vivo studies implicates intracellular generation of ceramide (CER), a biologically-active sphingolipid, as a trigger in the onset of β-cell demise under above pathological conditions. Recent pharmacological and molecular biological evidence affirms regulatory roles for Ras-related C3 botulinum toxin substrate 1 (Rac1), a small G protein, in the islet β-cell function in health and diabetes. In this Commentary, we overviewed the emerging evidence implicating potential cross-talk between Rac1 and ceramide signaling pathways in the onset of metabolic dysregulation of the islet β-cell culminating in impaired physiological insulin secretion, loss of β-cell mass and the onset of diabetes. Further, we propose a model depicting contributory roles of defective protein lipidation (prenylation) pathway in the induction of metabolic defects in the β-cell under metabolic stress conditions. Potential avenues for the identification of novel therapeutic targets for the prevention/treatment of diabetes and its associated complications are highlighted.