Type 2 diabetes (T2DM) commonly arises from islet β cell failure and insulin resistance. Here, we examined the sensitivity of key islet-enriched transcription factors to oxidative stress, a condition associated with β cell dysfunction in both type 1 diabetes (T1DM) and T2DM. Hydrogen peroxide treatment of β cell lines induced cytoplasmic translocation of MAFA and NKX6.1. In parallel, the ability of nuclear PDX1 to bind endogenous target gene promoters was also dramatically reduced, whereas the activity of other key β cell transcriptional regulators was unaffected. MAFA levels were reduced, followed by a reduction in NKX6.1 upon development of hyperglycemia in db/db mice, a T2DM model. Transgenic expression of the glutathione peroxidase-1 antioxidant enzyme (GPX1) in db/db islet β cells restored nuclear MAFA, nuclear NKX6.1, and β cell function in vivo. Notably, the selective decrease in MAFA, NKX6.1, and PDX1 expression was found in human T2DM islets. MAFB, a MAFA-related transcription factor expressed in human β cells, was also severely compromised. We propose that MAFA, MAFB, NKX6.1, and PDX1 activity provides a gauge of islet β cell function, with loss of MAFA (and/or MAFB) representing an early indicator of β cell inactivity and the subsequent deficit of more impactful NKX6.1 (and/or PDX1) resulting in overt dysfunction associated with T2DM.