Insulin resistance, hyperinsulinemia, and hyperproinsulinemia occur early in the pathogenesis of type 2 diabetes (T2D). Elevated levels of proinsulin and proinsulin intermediates are markers of β-cell dysfunction and are strongly associated with development of T2D in humans. However, the mechanism(s) underlying β-cell dysfunction leading to hyperproinsulinemia is poorly understood. Here, we show that disruption of insulin receptor (IR) expression in β cells has a direct impact on the expression of the convertase enzyme carboxypeptidase E (CPE) by inhibition of the eukaryotic translation initiation factor 4 gamma 1 translation initiation complex scaffolding protein that is mediated by the key transcription factors pancreatic and duodenal homeobox 1 and sterol regulatory element-binding protein 1, together leading to poor proinsulin processing. Reexpression of IR or restoring CPE expression each independently reverses the phenotype. Our results reveal the identity of key players that establish a previously unknown link between insulin signaling, translation initiation, and proinsulin processing, and provide previously unidentified mechanistic insight into the development of hyperproinsulinemia in insulin-resistant states.