This study aimed to identify circular RNAs differentially expressed in the islets of type 2 diabetes (T2DM) models and clarify their roles in the control of β-cell functions. Circular RNAs dysregulated in the islets of diabetic db/db mice were identified by high-throughput RNA sequencing. Then, the expression level of the selected circular RNA circ-Tulp4 was confirmed by real-time PCR in the islets of diabetic models and Min6 cells. MTS, EdU, western blot, flow cytometric analysis, and luciferase assay were performed to investigate the impact of circ-Tulp4 on β-cell functions. This study identified thousands of circular RNAs in mouse pancreatic islets. The circ-Tulp4 level significantly decreased in the diabetic models and altered in the Min6 cells under lipotoxic condition. The modulation of circ-Tulp4 level in Min6 cells regulated cell proliferation. Furthermore, an interaction was demonstrated between circ-Tulp4 and miR-7222-3p, which suppressed the expression of cholesterol esterification-related gene, sterol O-acyltransferase 1 (SOAT1). The accumulation of soat1 activated cyclin D1 expression, thus promoting cell cycle progression. These findings showed that circ-Tulp4 regulated β-cell proliferation via miR-7222-3p/soat1/cyclin D1 signaling. Our research suggested that circ-Tulp4 might be a potential therapeutic intervention for T2DM. Besides, soat1 might be important for β-cell adaptation to lipotoxicity.