Deterioration of functional islet β-cell mass is the final step in progression to Type 2 diabetes. We previously reported that overexpression of Nkx6.1 in rat islets has the dual effects of enhancing glucose-stimulated insulin secretion (GSIS) and increasing β-cell replication. Here we show that Nkx6.1 strongly upregulates the prohormone VGF in rat islets and that VGF is both necessary and sufficient for Nkx6.1-mediated enhancement of GSIS. Moreover, the VGF-derived peptide TLQP-21 potentiates GSIS in rat and human islets and improves glucose tolerance in vivo. Chronic injection of TLQP-21 in prediabetic ZDF rats preserves islet mass and slows diabetes onset. TLQP-21 prevents islet cell apoptosis by a pathway similar to that used by GLP-1, but independent of the GLP-1, GIP, or VIP receptors. Unlike GLP-1, TLQP-21 does not inhibit gastric emptying or increase heart rate. We conclude that TLQP-21 is a targeted agent for enhancing islet β-cell survival and function.