Type 2 diabetes (T2D) is associated with defective insulin secretion, which in turn contributes to worsening glycaemic control and disease progression. The genetic cause(s) associated with impaired insulin secretion in T2D are not well elucidated. Here we used the polygenic New Zealand Obese (NZO) mouse model, which displays all the cardinal features of T2D including hyperglycaemia to identify genes associated with β-cell dysfunction. A genome-wide scan identified a major quantitative trait locus (QTL) on chromosome 7 associated with defective glucose-mediated insulin secretion. Using congenic strains, the locus was narrowed to two candidate genes encoding the components of the KATP channel: Abcc8 (SUR1) and Kcnj11 (Kir6.2). The NZO Abcc8 allele was associated with a ∼211 bp deletion in its transcript and reduced expression of SUR1. Transgenic NZO mice were generated that expressed the WT Abcc8/Kcnj11 genes and displayed significant improvements in early-phase glucose-mediated insulin secretion and glucose tolerance, confirming Abcc8 as a causative gene. Importantly, we showed that despite improving β-cell function in the NZO transgenic mice, there was no enhancement of insulin sensitivity or body weight. This study provides evidence for a role of Abcc8 in early-phase glucose-mediated insulin secretion and validates this gene as a contributor to β-cell dysfunction in T2D.