Deregulation of mTOR complex 1 (mTORC1) signalling increases the risk for metabolic diseases, including type 2 diabetes. Here we show that β-cell-specific loss of mTORC1 causes diabetes and β-cell failure due to defects in proliferation, autophagy, apoptosis and insulin secretion by using mice with conditional (βraKO) and inducible (MIP-βraKOf/f) raptor deletion. Through genetic reconstitution of mTORC1 downstream targets, we identify mTORC1/S6K pathway as the mechanism by which mTORC1 regulates β-cell apoptosis, size and autophagy, whereas mTORC1/4E-BP2-eIF4E pathway regulates β-cell proliferation. Restoration of both pathways partially recovers β-cell mass and hyperglycaemia. This study also demonstrates a central role of mTORC1 in controlling insulin processing by regulating cap-dependent translation of carboxypeptidase E in a 4EBP2/eIF4E-dependent manner. Rapamycin treatment decreases CPE expression and insulin secretion in mice and human islets. We suggest an important role of mTORC1 in β-cells and identify downstream pathways driving β-cell mass, function and insulin processing.