Histomorphological and functional alterations in pancreatic islet composition directly correlate with hyperglycemia severity. Progressive deterioration of metabolic control in subjects suffering from type 2 diabetes is predominantly caused by impaired beta-cell functionality. The glutaredoxin system is supposed to wield protective properties for beta-cells. Therefore, we sought to identify a correlation between the structural changes observed in diabetic pancreatic islets with altered glutaredoxin 5 expression, in order to determine an underlying mechanism of beta-cell impairment. Islets of db/db mice presenting with uncontrolled diabetes were assessed in terms of morphological structure and insulin, glucagon, and glutaredoxin 5 expression. MIN6 cell function and glutaredoxin 5 expression were analyzed after exposure to oleic acid and hypoxia. Islets of diabese mice were marked by typical remodeling and distinct reduction of, and shifts, in localization of glutaredoxin 5-positive cells. These islets featured decreased glutaredoxin 5 as well as insulin and glucagon content. In beta-cell culture, glutaredoxin 5 protein and mRNA expression were decreased by hypoxia and oleic acid but not by leptin treatment. Our study demonstrates that glutaredoxin 5 expression patterns are distinctively altered in islets of rodents presenting with uncontrolled diabesity. In vitro, reduction of islet-cell glutaredoxin 5 expression was mediated by hypoxia and oleic acid. Thus, glutaredoxin 5-deficiency in islets during diabetes may be caused by lipotoxicity and hypoxia.