Long-term medication with dexamethasone (a synthetic glucocorticoid (GC) drug) results in hyperglycemia, or steroid-induced diabetes. Although recent studies revealed dexamethasone directly induces pancreatic β-cell apoptosis, its molecular mechanisms remain unclear. In our initial analysis of mRNA transcripts, we discovered the tumor necrosis factor-related apoptosis-inducing ligand (TRAIL) pathway may be involved in dexamethasone-induced pancreatic β-cell apoptosis. In the present study, a mechanism of dexamethasone-induced pancreatic β-cell apoptosis through the TRAIL pathway was investigated in cultured cells and isolated mouse islets. INS-1 cells were cultured with and without dexamethasone in the presence or absence of a glucocorticoid receptor (GR) inhibitor, RU486. We found that dexamethasone induced pancreatic β-cell apoptosis in association with the upregulation of TRAIL mRNA and protein expression. Moreover, dexamethasone upregulated the TRAIL death receptor (DR5) protein but suppressed the decoy receptor (DcR1) protein. Similar findings were observed in mouse isolated islets: dexamethasone increased TRAIL and DR5 compared to that of control mice. Furthermore, dexamethasone stimulated pro-apoptotic signaling including superoxide production, caspase-8, -9, and -3 activities, NF-B, and Bax, but repressed the anti-apoptotic protein, Bcl-2. All these effects were inhibited by the GR-inhibitor, RU486. Furthermore, knock down DR5 decreased dexamethasone-induced caspase 3 activity. Caspase-8 and caspase-9 inhibitors protected pancreatic β-cells from dexamethasone-induced apoptosis. Taken together, dexamethasone induced pancreatic β-cell apoptosis by binding to the GR and inducing DR5 and TRAIL pathway.