Multiple forms of heritable diabetes are associated with mutations in transcription factors that regulate insulin gene transcription and the development and maintenance of pancreatic -cell mass. The coactivator Bridge-1 (PSMD9) regulates the transcriptional activation of glucose-responsive enhancers in the insulin gene in a dose-dependent manner via PDZ-domain mediated interactions with E2A transcription factors. Here we report that the pancreatic overexpression of Bridge-1 in transgenic mice reduces insulin gene expression and results in insulin deficiency and severe diabetes. Dysregulation of Bridge-1 signaling increases pancreatic apoptosis with a reduction in the number of insulin-expressing pancreatic cells and an expansion of the complement of glucagon-expressing pancreatic cells in pancreatic islets. Increased expression of Bridge-1 alters pancreatic islet, acinar, and ductal architecture and disrupts the boundaries between endocrine and exocrine cellular compartments in young adult but not neonatal mice, suggesting that signals transduced through this coactivator may influence postnatal pancreatic islet morphogenesis. Signals mediated through the coactivator Bridge-1 may regulate both glucose homeostasis and pancreatic -cell survival. We propose that coactivator dysfunction in pancreatic cells can limit insulin production and contribute to the pathogenesis of diabetes.