Amyloid formation in the pancreatic islets due to aggregation of human islet amyloid polypeptide (hIAPP) contributes to reduced β-cell mass and function in type 2 diabetes (T2D) and islet transplantation. Protein kinase B (PKB) signaling plays a key role in the regulation of β-cell survival, function and proliferation. In this study, we used human and hIAPP-expressing transgenic mouse islets in culture as two ex vivo models of human islet amyloid formation to: 1. Investigate the effects of amyloid formation on PKB phosphorylation in primary islet β-cells; 2. Test if inhibition of amyloid formation and/or interleukin-1β (IL-1β) signaling in islets can restore the changes in β-cell phospho-PKB levels mediated by amyloid formation. Human and hIAPP-expressing mouse islets were cultured in elevated glucose with an amyloid inhibitor (Congo red) or embedded within collagen matrix to prevent amyloid formation. To block the IL-1β signaling, human islets were treated with an IL-1 receptor antagonist (anakinra) or a glucagon-like peptide-1 agonist (exenatide). β-cell phospho-PKB levels, proliferation, apoptosis, islet IL-1β levels and amyloid formation were assessed. Amyloid formation in both cultured human and hIAPP-expressing mouse islets reduced β-cell phospho-PKB levels and increased islet IL-1β levels, both of which were restored by prevention of amyloid formation either by the amyloid inhibitor or embedding islets in collagen matrix, resulting in improved β-cell survival. Furthermore, inhibition of IL-1β signaling by treatment with anakinra or exenatide increased β-cell phospho-PKB levels, enhanced proliferation and reduced apoptosis in amyloid forming human islets during 7-day culture. These data suggest that amyloid formation leads to reduced PKB phosphorylation in β-cells which is associated with elevated islet IL-1β levels. Inhibitors of amyloid or amyloid-induced IL-1β production may provide a new approach to restore phospho-PKB levels thereby enhance β-cell survival and proliferation in conditions associated with islet amyloid formation such as T2D and clinical islet transplantation.