Phosphorylation of eukaryotic initiation factor 2α (eIF-2α) is typically associated with stress responses and causes a reduction in protein synthesis. However, we found high phosphorylated eIF-2α (eIF-2α [P]) levels in nonstressed pancreata of mice. Administration of glucose stimulated a rapid dephosphorylation of eIF-2α. Among the four eIF-2α kinases present in mammals, PERK is most highly expressed in the pancreas, suggesting that it may be responsible for the high eIF-2α [P] levels found therein. We describe a Perk knockout mutation in mice. Pancreata of Perk−/− mice are morphologically and functionally normal at birth, but the islets of Langerhans progressively degenerate, resulting in loss of insulin-secreting beta cells and development of diabetes mellitus, followed later by loss of glucagon-secreting alpha cells. The exocrine pancreas exhibits a reduction in the synthesis of several major digestive enzymes and succumbs to massive apoptosis after the fourth postnatal week. Perk−/− mice also exhibit skeletal dysplasias at birth and postnatal growth retardation. Skeletal defects include deficient mineralization, osteoporosis, and abnormal compact bone development. The skeletal and pancreatic defects are associated with defects in the rough endoplasmic reticulum of the major secretory cells that comprise the skeletal system and pancreas. The skeletal, pancreatic, and growth defects are similar to those seen in human Wolcott-Rallison syndrome.