Somatostatin receptor subtype 5 (SSTR5) mediates the inhibitory effect of somatostatin and its analogs on insulin expression/secretion and islet cell proliferation. We provide biochemical and genetic evidence that SSTR5 exerted its physiological actions via down-regulating pancreatic and duodenal homeobox-1 (PDX-1), a β-cell-specific homeodomain-containing transcription factor. Cotransfection of SSTR5 with PDX-1 resulted in dose-dependent inhibition of PDX-1 expression in human embryonic kidney 293 cells. SSTR5 agonist RPL-1980 inhibited PDX-1 expression and abolished glucagon-like peptide 1-stimulated PDX-1 expression in mouse insulinoma β-TC-6 cells. SSTR5 knockdown by short hairpin RNA led to increased PDX-1 expression that was accompanied by enhanced insulin secretion stimulated by high glucose in β-TC6 cells and alternated expressions of cell cycle proteins that favor cell proliferation in mouse insulinoma MIN6 cells. Quantitative RT-PCR analysis showed that cotransfected SSTR5 inhibited PDX-1 mRNA expression, whereas knockdown of SSTR5 increased PDX-1 mRNA expression. In addition, we found that cotransfected wild-type SSTR5 increased PDX-1 ubiquitination in human embryonic kidney 293 cells, whereas SSTR5 P335L, a hypofunctional single nucleotide polymorphism of SSTR5, inhibited PDX-1 ubiquitination. SSTR5 knockout resulted in increased expression of PDX-1, insulin, and proliferating cell nuclear antigen in the islets of sstr(-/-) mice. Immunohistochemistry analysis showed that SSTR5 P335L was associated with elevated expression of PDX-1 in human pancreatic neuroendocrine tumor. Taken together, our studies demonstrated that SSTR5 is a negative regulator for PDX-1 expression and that SSTR5 may mediate the inhibitory effects of somatostatin and its analogs on insulin expression/secretion and cell proliferation via down-regulating PDX-1 at both transcriptional and posttranslational levels.