High amount of fat in the pancreas is linked to poor functioning of β-cells and raises the risk of type 2 diabetes. Here we report the putative role of a circulatory glycoprotein Fetuin-A, a known obesity marker, in promoting lipid accumulation in β-cells and its association with Fatty acid translocase/CD36 for lipid storage culminate in β-cell dysfunction. Additionally, this work reveals regulation of CD36 via Nrf2, a key regulator of oxidative stress, and reduction of lipid accumulation by suppression of Nrf2 that restores β-cell function. Palmitate (0.50 mM) and Fetuin-A (100 μg/mL) exposure showed high levels of intracellular lipid in MIN6 (mouse insulinoma cells) with a concomitant decrease in insulin secretion. This also increased the expression of important lipogenic factors, like CD36, PGC1α, PPARγ, and SREBP1. Flow cytometry analysis of CD36 membrane localization has been corroborated with an increased accumulation of lipids as indicated by Oil-Red-O staining. Immunoblotting and immunofluorescence of Nrf2 indicated its high expression in palmitate-fetuin-A incubation and translocation in the nucleus. Suppression of Nrf2 by siRNA showed a reduced expression of lipogenic genes, ablation of lipid droplets, decrease in the number of apoptotic cells, and restoration of insulin secretion with a corresponding increase of Pdx1, BETA2, and Ins1 gene expression. Our study thus suggested an important aspect of lipid accumulation in the pancreatic β-cells contributing to β-cell dysfunction and demonstrated the role of Fetuin-A in CD36 expression, with a possible way of restoring β-cell function by targeting Nrf2.