Background: Changes in gene expression in pancreatic beta-cells from type 2 diabetes (T2D) should provide insights into their abnormal insulin secretion and turnover. Methodology/Principal Findings: Frozen sections were obtained from cadaver pancreases of 10 control and 10 T2D human subjects. Beta-cell enriched samples were obtained by laser capture microdissection (LCM). RNA was extracted, amplified and subjected to microarray analysis. Further analysis was performed with DNA-Chip Analyzer (dChip) and Gene Set Enrichment Analysis (GSEA) software. There were changes in expression of genes linked to glucotoxicity. Evidence of oxidative stress was provided by upregulation of several metallothionein genes. There were few changes in the major genes associated with cell cycle, apoptosis or endoplasmic reticulum stress. There was differential expression of genes associated with pancreatic regeneration, most notably upregulation of members of the regenerating islet gene (REG) family and metalloproteinase 7 (MMP7). Some of the genes found in GWAS studies to be related to T2D were also found to be differentially expressed. IGF2BP2, TSPAN8, and HNF1B (TCF2) were upregulated while JAZF1 and SLC30A8 were downregulated. Conclusions/Significance: This study made possible by LCM has identified many novel changes in gene expression that enhance understanding of the pathogenesis of T2D.