The early phase of type 2 diabetes mellitus (T2DM) is characterised by insulin resistance, which can initially be compensated by elevated insulin secretion. However, as postulated by the workload hypothesis, over time harming insulin requirements contribute to β-cell dysfunction and death. The mechanisms behind this transition are complex and not fully understood but involve factors such as endoplasmic reticulum (ER) stress raised by gluco/lipotoxicity. To investigate the effect of excessive insulin folding on ER luminal H2O2 generation, ER stress and viability, insulin was expressed glucose-independently by a doxycycline-regulated Tet-On system in insulin-producing RINm5F cells. Additionally, the effect of palmitic acid (PA) as a subsidiary T2DM-associated factor was examined in this model system. Elevated insulin expression increased ER luminal H2O2 concentration quantified by the fluorescent sensor protein TriPer and reduced viability, but did not activate apoptosis. However, when combined with PA, insulin expression resulted in a significant increase in ER stress and apoptosis. Expression of ER-localised catalase verified the specificity of the applied H2O2 detection method without attenuating ER stress, caspase activation or viability loss. These findings suggest that hyperinsulinism alone can cause increased ER luminal H2O2 generation, mild ER stress and reduced viability, while hyperinsulinism in combination with PA accelerates these processes and triggers apoptosis. The inability of ER catalase to counteract these effects suggests that further damaging factors besides H2O2 are involved in cell dysfunction. Finally, reducing the high insulin demand in the initial phase of T2DM may be crucial in preventing further β-cell damage caused by gluco/lipotoxicity.