Aims: Reactive oxygen species (ROS) such as H2O2 can promote signalling through the inactivation of protein tyrosine phosphatases (PTPs). However in obesity the generation of ROS exceeds the antioxidant reserve and can contribute to the promotion of insulin resistance. Glutathione peroxidase 1 (Gpx1) is an antioxidant enzyme that eliminates H2O2. Here we have used Gpx1-/- mice to assess the impact of oxidative stress on glucose homeostasis in the context of obesity. Results: Gpx1-/- mice fed an obesogenic high fat diet for 12 weeks exhibited systemic oxidative stress and hyperglycemia, but had unaltered whole-body insulin sensitivity, improved hepatic insulin signalling and decreased whole-body glucose production. High fat fed Gpx1-/- mice also exhibited decreased hepatic steatosis and liver damage accompanied by decreased plasma insulin and decreased glucose-induced insulin secretion. The decreased insulin secretion was associated with reduced islet beta cell Pdx1 and insulin content, elevated pancreatic PTP oxidation (including PTPN2 oxidation) and elevated STAT1 Y701 phosphorylation. Innovation and conclusion: Taken together these results are consistent with H2O2 inactivating pancreatic PTPs (such as the STAT1 phosphatase PTPN2) for the promotion of STAT-1 signalling to suppress Pdx1 expression and differentiation and consequently reduce beta cell insulin secretion. We propose that the decreased insulin secretion in turn results in decreased hepatic lipogenesis and steatosis, attenuates liver damage and improves hepatic insulin signalling to suppress hepatic glucose production. Limiting insulin secretion may help combat the development of hepatic steatosis and liver damage in diet-induced obesity.