Cathelicidin antimicrobial peptide (CAMP) is a naturally occurring secreted peptide that is expressed in several organs with pleiotropic roles in immunomodulation, wound healing, and cell growth. We previously demonstrated that gut Camp expression is upregulated when type 1 diabetes–prone rats are protected from diabetes development. Unexpectedly, we have also identified novel CAMP expression in the pancreatic β-cells of rats, mice, and humans. CAMP was present even in sterile rat embryo islets, germ-free adult rat islets, and neogenic tubular complexes. Camp gene expression was downregulated in young BBdp rat islets before the onset of insulitis compared with control BBc rats. CAMP treatment of dispersed islets resulted in a significant increase in intracellular calcium mobilization, an effect that was both delayed and blunted in the absence of extracellular calcium. Additionally, CAMP treatment promoted insulin and glucagon secretion from isolated rat islets. Thus, CAMP is a promoter of islet paracrine signaling that enhances islet function and glucoregulation. Finally, daily treatment with the CAMP/LL-37 peptide in vivo in BBdp rats resulted in enhanced β-cell neogenesis and upregulation of potentially beneficial gut microbes. In particular, CAMP/LL-37 treatment shifted the abundance of specific bacterial populations, mitigating the gut dysbiosis observed in the BBdp rat. Taken together, these findings indicate a novel functional role for CAMP/LL-37 in islet biology and modification of gut microbiota.