The calcium binding protein S100B has been implicated in diabetic neuronal and vascular complications but has not been examined in the development of diabetes. S100B knock out (S100B KO) and wild-type (WT) mice were injected with 40 mg/kg body weight streptozotocin (STZ) for 5 days. Blood and pancreatic tissue samples were obtained to examine islet structure and function, the profile of glucose and insulin and expression of glucose transporter 2 (Glut2), S100B and its receptor, the receptor for advanced glycation end products (RAGE). Primary islet β-cells cultures from WT mice were used to test the apoptotic potential of S100B. S100B KO mice were resistant to STZ induced-diabetes with lower urine volume, food and water intake compared to WT mice. S100B increased in the WT islet following diabetes but did not co-localize with beta or peri-islet Schwann cells but with CD3 + T lymphocytes. S100B KO mice exhibited enhanced glucose tolerance, insulin sensitivity, prevented β-cell destruction and functional impairment in response to STZ treatment. S100B deficiency was associated with decreased Glut2 and RAGE. In primary β-cell cultures from WT mice, S100B induced reactive oxygen species (ROS) and RAGE-dependent apoptosis. In the STZ diabetic animal model, abrogation of S100B enhances insulin sensitivity and reduces pancreatic islet, and β-cell destruction. S100B may be a promising target for pharmacological interventions aimed at repressing diabetes.