The accumulation of unfolded protein in the endoplasmic reticulum (ER) attenuates protein synthesis initiation through phosphorylation of the α subunit of eukaryotic translation initiation factor 2 (eIF2α) at Ser51. Subsequently, transcription of genes encoding adaptive functions including the glucose-regulated proteins is induced. We show that eIF2α phosphorylation is required for translation attenuation, transcriptional induction, and survival in response to ER stress. Mice with a homozygous mutation at the eIF2α phosphorylation site (Ser51Ala) died within 18 hr after birth due to hypoglycemia associated with defective gluconeogenesis. In addition, homozygous mutant embryos and neonates displayed a deficiency in pancreatic β cells. The results demonstrate that regulation of translation through eIF2α phosphorylation is essential for the ER stress response and in vivo glucose homeostasis.