Molecular mechanisms remain unknown for most type 2 diabetes genome-wide association study identified loci. Variants associated with type 2 diabetes and fasting glucose levels reside in introns of ADCY5, a gene that encodes adenylate cyclase 5. Adenylate cyclase 5 catalyzes the production of cyclic AMP, which is a second messenger molecule involved in cell signaling and pancreatic β-Cell insulin secretion. We demonstrated that type 2 diabetes risk alleles are associated with decreased ADCY5 expression in human islets and examined candidate variants for regulatory function. rs11708067 overlaps a predicted enhancer region in pancreatic islets. The type 2 diabetes risk rs11708067-A allele showed fewer H3K27ac ChIP-seq reads in human islets, lower transcriptional activity in reporter assays in rodent b-cells (rat 832/13 and mouse MIN6), and increased nuclear protein binding compared with the rs11708067-G allele. Homozygous deletion of the orthologous enhancer region in 832/13 cells resulted in a 64% reduction in expression level of Adcy5, but not adjacent gene Sec22a, and a 39% reduction in insulin secretion. Together, these data suggest that rs11708067-A risk allele contributes to type 2 diabetes by disrupting an islet enhancer, which results in reduced ADCY5 expression and impaired insulin secretion