Recent clinical and experimental evidence suggests that endoplasmic reticulum (ER) stress contributes to the life-and-death decisions of β cells during the progression of type 1 and type 2 diabetes. Although crosstalk between inflammation and ER stress has been suggested to play a significant role in β cell dysfunction and death, a key molecule connecting ER stress to inflammation has not been identified. Here we report that thioredoxin-interacting protein (TXNIP) is a critical signaling node that links ER stress and inflammation. TXNIP is induced by ER stress through the PERK and IRE1 pathways, induces IL-1β mRNA transcription, activates IL-1β production by the NLRP3 inflammasome, and mediates ER stress-mediated β cell death. Collectively, our results suggest that TXNIP is a potential therapeutic target for diabetes and ER stress-related human diseases such as Wolfram syndrome.