Recent studies have demonstrated that the COOH-terminal fragment of the incretin hormone glucagon-like peptide-1 (GLP-1), a nonapeptide GLP-1(28–36)amide, attenuates diabetes and hepatic steatosis in diet-induced obese mice. However, the effect of this nonapeptide in pancreatic β-cells remains largely unknown. Here, we show that in a streptozotocin-induced mouse diabetes model, GLP-1(28–36)amide improved glucose disposal and increased pancreatic β-cell mass and β-cell proliferation. An in vitro investigation revealed that GLP-1(28–36)amide stimulates β-catenin (β-cat) Ser⁶⁷⁵ phosphorylation in both the clonal INS-1 cell line and rat primary pancreatic islet cells. In INS-1 cells, the stimulation was accompanied by increased nuclear β-cat content. GLP-1(28–36)amide was also shown to increase cellular cAMP levels, PKA enzymatic activity, and cAMP response element-binding protein (CREB) and cyclic AMP-dependent transcription factor-1 (ATF-1) phosphorylation. Furthermore, GLP-1(28–36)amide treatment enhanced islet insulin secretion and increased the growth of INS-1 cells, which was associated with increased cyclin D1 expression. Finally, PKA inhibition attenuated the effect of GLP-1(28–36)amide on β-cat Ser⁶⁷⁵ phosphorylation and cyclin D1 expression in the INS-1 cell line. We have thus revealed the beneficial effect of GLP-1(28–36)amide in pancreatic β-cells in vitro and in vivo. Our observations suggest that GLP-1(28–36)amide may exert its effect through the PKA/β-catenin signaling pathway.