Chronic hepatitis C virus (HCV) infection has a close association with type 2 diabetes mellitus. Although the mechanisms of insulin resistance in chronic hepatitis C (CHC) patients have been extensively studied, little attention has been given to the role of β-cell function in HCV-associated diabetes. Here, we analysed β-cell function in CHC patients and HCV-infected mouse model and found in addition to insulin resistance, impaired pancreatic β-cell function occurred in CHC patients and HCV-infected C/OTg mice, not only in diabetic individuals but also in individuals with impaired fasting glucose levels. Both first-phase and second-phase insulin secretion were impaired, at least partially due to the reduction of exocytosis of secretory insulin-containing granules following HCV infection. Up-regulated p38δ in HCV-infected β-cells resulted in inactivation of protein kinase D (PKD), which was responsible for impaired insulin secretory capacity of β-cells. Thus, impaired insulin secretion due to HCV infection in β-cells contributes to HCV-associated type 2 diabetes. These findings provided a new inspiration for the important prognostic and therapeutic implications in the management of CHC patients with impaired fasting glucose.