Glucose is the main physiological stimulus for insulin biosynthesis and secretion by pancreatic beta-cells. Glucose-6-phosphatase (G-6-Pase) catalyzes the dephosphorylation of glucose-6-phosphate to glucose, an opposite process to glucose utilization. G-6-Pase activity in pancreatic islets could therefore be an important factor in the control of glucose metabolism and, consequently, of glucose-dependent insulin secretion. While G-6-Pase activity has been shown to be present in pancreatic islets, the gene responsible for this activity has not been conclusively identified. A homolog of liver glucose-6-phosphatase (LG-6-Pase) specifically expressed in islets was described earlier; however, the authors could not demonstrate enzymatic activity for this protein. Here we present evidence that the previously identified islet-specific glucose-6-phosphatase-related protein (IGRP) is indeed the major islet glucose-6-phosphatase. IGRP overexpressed in insect cells possesses enzymatic activity comparable to the previously described G-6-Pase activity in islets. The K(m) and V(max) values determined using glucose-6-phosphate as the substrate were 0.45 mm and 32 nmol/mg/min by malachite green assay, and 0.29 mm and 77 nmol/mg/min by glucose oxidase/peroxidase coupling assay, respectively. High-throughput screening of a small molecule library led to the identification of an active compound that specifically inhibits IGRP enzymatic activity. Interestingly, this inhibitor did not affect LG-6-Pase activity, while conversely LG-6-Pase inhibitors did not affect IGRP activity. These data demonstrate that IGRP is likely the authentic islet-specific glucose-6-phosphatase catalytic subunit, and selective inhibitors to this molecule can be obtained. IGRP inhibitors may be an attractive new approach for the treatment of insulin secretion defects in type 2 diabetes.