The insulin receptor (INSR, IR) has two isoforms, IRA and IRB, through alternative splicing. However, their distinct functions in vivo remain unclear. Here we gnerated β cell-specific IRB KO mice (βIRBKO). The KO mice displayed worsened hyperinsulinemia and hyperproinsulinemia in diet-induced obesity due to impaired proinsulin processing in β cells. Mechanistically, loss of IRB suppresses eukaryotic translation initiation factor 4G1 (eIF4G1) by stabilizing the transcriptional receptor sterol-regulatory element binding protein 1 (SREBP1). Moreover, excessive autocrine proinsulin in βIRBKO mice enhances the activity of extracellular signal-regulated kinase (ERK) through the remaining IRA to further stabilize nuclear SREBP1, forming a feedback loop. Collectively, our study paves the way to dissecting the isoform-specific function of IR in vivo and highlights the important roles of IRB in insulin processing and protecting β cells from lipotoxicity in obesity.