Changes in metabolic demands dynamically regulate the total mass of adult pancreatic β-cells to adjust insulin secretion and preserve glucose homeostasis. Glucose itself is a major regulator of β-cell proliferation by inducing insulin secretion and activating β-cell insulin receptors. Here, we show that islet cell autoantigen 512 (ICA512)/IA-2, an intrinsic tyrosine phosphatase-like protein of the secretory granules, activates a complementary pathway for β-cell proliferation. On granule exocytosis, the ICA512 cytoplasmic domain is cleaved and the resulting cytosolic fragment (ICA512-CCF) moves into the nucleus where it enhances the levels of phosphorylated STAT5 and STAT3, thereby inducing insulin gene transcription and granule biogenesis. We now show that knockdown of ICA512 decreases cyclin D1 levels and proliferation of insulinoma INS-1 cells, whereas β-cell regeneration is reduced in partially pancreatectomized ICA512^-/- mice. Conversely, overexpression of ICA512-CCF increases both cyclin D1 and D2 levels and INS-1 cell proliferation. Up-regulation of cyclin D1 and D2 by ICA512-CCF is affected by knockdown of STAT3 and STAT5, respectively, whereas it does not require insulin signaling. These results identify ICA512 as a regulator of cyclins D and β-cell proliferation through STATs and may have implication for diabetes therapy.