Deficient as well as excessive/prolonged endoplasmic reticulum (ER) stress signaling can lead to pancreatic β cell failure and the development of diabetes. Saturated free fatty acids (FFAs) such as palmitate induce lipotoxic ER stress in pancreatic β cells. One of the main ER stress response pathways is under the control of the protein kinase R-like endoplasmic reticulum kinase (PERK), leading to phosphorylation of the eukaryotic translation initiation factor 2 (eIF2α). The antihypertensive drug guanabenz has been shown to inhibit eIF2α dephosphorylation and protect cells from ER stress. Here we examined whether guanabenz protects pancreatic β cells from lipotoxicity. Guanabenz induced β cell dysfunction in vitro and in vivo in rodents and led to impaired glucose tolerance. The drug significantly potentiated FFA-induced cell death in clonal rat β cells and in rat and human islets. Guanabenz enhanced FFA-induced eIF2α phosphorylation and expression of the downstream proapoptotic gene C/EBP homologous protein (CHOP), which mediated the sensitization to lipotoxicity. Thus, guanabenz does not protect β cells from ER stress; instead, it potentiates lipotoxic ER stress through PERK/eIF2α/CHOP signaling. These data demonstrate the crucial importance of the tight regulation of eIF2α phosphorylation for the normal function and survival of pancreatic β cells.