Glucocorticoids (GCs), such as prednisolone (PRED), are widely prescribed anti-inflammatory drugs, but their use may induce glucose intolerance and diabetes. GC-induced beta cell dysfunction contributes to these diabetogenic effects through mechanisms that remain to be elucidated. In this study, we hypothesized that activation of the unfolded protein response (UPR) following endoplasmic reticulum (ER) stress could be one of the underlying mechanisms involved in GC-induced beta cell dysfunction. We report here that PRED did not affect basal insulin release but time-dependently inhibited glucose-stimulated insulin secretion in INS-1E cells. PRED treatment also decreased both PDX1 and insulin expression, leading to a marked reduction in cellular insulin content. These PRED-induced detrimental effects were found to be prevented by prior treatment with the glucocorticoid receptor (GR) antagonist RU486 and associated with activation of two of the three branches of the UPR. Indeed, PRED induced a GR-mediated activation of both ATF6 and IRE1/XBP1 pathways but was found to reduce the phosphorylation of PERK and its downstream substrate eIF2α. These modulations of ER stress pathways were accompanied by upregulation of calpain 10 and increased cleaved caspase 3, indicating that long term exposure to PRED ultimately promotes apoptosis. Taken together, our data suggest that the inhibition of insulin biosynthesis by PRED in the insulin-secreting INS-1E cells results, at least in part, from a GR-mediated impairment in ER homeostasis which may lead to apoptotic cell death.