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The rising incidence of type 2 diabetes is due, in part, to the detrimental effects of certain fatty acids on pancreatic β-cell function and viability. The present review examines recent advances in the understanding of the molecular mechanisms by which fatty acids influence the life and death of β cells.There are important differences in the cytotoxic potential of fatty acids, with long-chain saturated molecules being the most potent. By contrast, monounsaturates and polyunsaturates are relatively well tolerated and, in some cases, are actively cytoprotective. The mechanisms underlying the toxicity of the saturates may reflect a decrease in protein processing, which drives the accumulation of unfolded proteins in the endoplasmic reticulum. This triggers an apoptotic response by virtue of enhanced endoplasmic reticulum stress and induction of CHOP-10 synthesis. Alterations in the regulatory control of other proapoptotic genes via changes in microRNA synthesis may also contribute. The cytoprotection deriving from incubation with long-chain mono-unsaturates is probably receptor mediated and involves antagonistic actions on the effector arm of the endoplasmic reticulum stress pathway.The findings have implications for the development of new therapeutic agents designed to minimize β-cell dysfunction and the loss of β-cell viability in type 2 diabetes.