BACKGROUND Chronically elevated free fatty acid levels can adversely affect pancreatic β-cells, leading to insulin resistance and eventually type 2 diabetes mellitus (T2DM). Polydatin (PD) from Polygonum cuspidatum has been shown to regulate blood lipid content and lower cholesterol levels. However, there have been no reports on the potential therapeutic effects and actions of PD on lipotoxicity in β-cells. OBJECTIVE This study aimed to investigate the protective effects of PD on palmitate (PA)-treated INS-1 insulinoma cells and diabetic mice. METHODS Cells were incubated with PA and varying concentrations of PD for 24 h. Viability assays, morphological observations, flow cytometric analysis, western blotting, and reverse transcription-quantitative polymerase chain reaction were used to assess the effects of PD on PA-induced lipotoxicity. Western blotting was used to measure the endoplasmic reticulum stress (ERS) and the levels of autophagy-related factors after incubation with inducers and inhibitors of ERS and autophagy. Diabetic mice were treated with intragastric PD for 6 weeks followed by the measurement of their physiological and blood lipid indices and assessment of the results of histological and immunofluorescence analyses. RESULTS Treatment with PD after PA exposure enhanced insulin secretion and the expression of diabetes-associated genes. PD promoted β-cell function by reducing the levels of proteins associated with ERS and autophagy while also attenuating ERS triggered by tunicamycin. PD also reduced tunicamycin-induced autophagy, indicating that it regulated ERS-mediated autophagy and reduced PA-induced cellular dysfunction. In addition, treatment of db/db mice with PD substantially reduced body weight gain, alleviated dyslipidemia, improved β-cell function, and reduced insulin resistance. CONCLUSIONS These results suggest that PD protects β-cells from lipotoxicity-induced dysfunction and apoptosis by inhibiting ERS and preventing excessive autophagy. Our study provides a new basis for exploring the potential of PD against β-cell lipotoxicity and T2DM.