Type 2 diabetes (T2D) arises when the pancreatic beta-cell fails to compensate for increased insulin needs due to insulin resistance. Glucolipotoxicity (GLT) has been proposed to induce beta-cell dysfunction in T2D by formation of reactive oxygen species (ROS). Here, we examined if modeling glucolipotoxic conditions by high glucose-high free fatty acid (FFA) exposure (GLT) regulates beta-cell iron transport, by increasing the cytosolic labile iron pool (LIP). In isolated mouse islets, the GLT-induced increase in the LIP catalyzed cytosolic ROS formation and induced apoptosis. We show that GLT-induced ROS production is regulated by an increased LIP associated with elevated expression of genes regulating iron import. Using pharmacological and transgenic approaches, we show that iron reduction and decreased iron import protects from GLT-induced ROS production, prevents impairment of the mitochondrial membrane potential (MMP) and inhibits apoptosis. This study identifies a novel pathway underlying GLT-induced apoptosis involving increased iron import, generation of hydroxyl radicals from hydrogen peroxide through the Fenton reaction in the cytosolic compartment associated with dissipation of the MMP and beta-cell apoptosis.