Abstract We present JWST MIRI Medium Resolution Spectrograph (MRS) observations of the β Pictoris system. We detect an infrared excess from the central unresolved point source from 5 to 7.5 μ m which is indicative of dust within the inner ∼7 au of the system. We perform point-spread function (PSF) subtraction on the MRS data cubes and detect a spatially resolved dust population emitting at 5 μ m. This spatially resolved hot dust population is best explained if the dust grains are in the small grain limit (2 π a ≪ λ ). The combination of unresolved and resolved dust at 5 μ m could suggest that dust grains are being produced in the inner few astronomical units of the system and are then radiatively driven outwards, where the particles could accrete onto the known planets in the system, β Pictoris b and c. We also report the detection of an emission line at 6.986 μ m that we attribute to Ar ii . We find that the Ar ii emission is spatially resolved with JWST and appears to be aligned with the dust disk. Through PSF-subtraction techniques, we detect β Pictoris b at the 5 σ level in our MRS data cubes and present the first mid-infrared spectrum of the planet from 5 to 7 μ m. The planet’s spectrum is consistent with having absorption from water vapor between 5 and 6.5 μ m. We perform atmosphere model grid fitting of the spectra and photometry of β Pictoris b and find that the planet’s atmosphere likely has a substellar C/O ratio.