c-Myc is a powerful trigger of beta-cell apoptosis, proliferation, and dedifferentiation in rodent islets in vivo. In a transgenic mouse model, c-Myc induction causes rapid beta-cell apoptosis and overt diabetes. When suppression of apoptosis is achieved by overexpression of Bcl-x(L) in an inducible model of c-Myc activation, a full spectrum of tumor development, including distant metastasis, occurs. Caspase-3 is a key pro-apoptotic protein involved in the execution phase of multiple apoptotic pathways. To test whether caspase-3 is an essential mediator of apoptosis in this model of tumorigenesis, we generated caspase-3 knock-out mice containing the inducible c-myc transgene (c-Myc(+)Casp3(-/-)). In contrast to Bcl-x(L)-overexpressing c-Myc(+) mice, c-Myc(+)Casp3(-/-) mice remained euglycemic for up to 30 days of c-Myc activation, and there was no evidence of tumor formation. Interestingly, caspase-3 deletion also led to the suppression of proliferation, perhaps through regulation of the cell cycle inhibitory protein p27, suggesting a possible mechanism for maintaining a balance between suppression of apoptosis and excessive proliferation in the context of c-Myc activation. Additionally, c-Myc-activated Casp3(-/-) mice were protected from streptozotocin-induced diabetes. Our studies demonstrate that caspase-3 deletion confers protection from c-Myc-induced apoptosis and diabetes development without unwanted tumorigenic effects. These results may lead to further elucidation of the mechanisms of c-Myc biology relevant to beta-cells, which may result in novel therapeutic strategies for diabetes.