Amyloid formation and mitochondrial dysfunction are characteristics of type 2 diabetes. The major peptide constituent of the amyloid deposits in type 2 diabetes is islet amyloid polypeptide (IAPP). In this study, we found that pitrilysin, a zinc metallopeptidase of the inverzincin family, degrades monomeric, but not oligomeric, islet amyloid polypeptide in vitro. In insulinoma cells when pitrilysin expression was decreased to 5% of normal levels, there was a 60% increase in islet amyloid polypeptide-induced apoptosis. In contrast, overexpression of pitrilysin protects insulinoma cells from human islet amyloid polypeptide-induced apoptosis. Since pitrilysin is a mitochondrial protein, we used immunofluorescence staining of pancreases from human IAPP transgenic mice and Western blot analysis of IAPP in isolated mitochondria from insulinoma cells to provide evidence for a putative intramitochondrial pool of IAPP. These results suggest that pitrilysin regulates islet amyloid polypeptide in beta cells and suggest the presence of an intramitochondrial pool of islet amyloid polypeptide involved in beta-cell apoptosis.