Intracellular nicotinamide phosphoribosyltransferase (iNampt) is an essential enzyme in the NAD biosynthetic pathway. An extracellular form of this protein (eNampt) has been reported to act as a cytokine named PBEF or an insulin-mimetic hormone named visfatin, but its physiological relevance remains controversial. Here we show that eNampt does not exert insulin-mimetic effects in vitro or in vivo but rather exhibits robust NAD biosynthetic activity. Haplodeficiency and chemical inhibition of Nampt cause defects in NAD biosynthesis and glucose-stimulated insulin secretion in pancreatic islets in vivo and in vitro. These defects are corrected by administration of nicotinamide mononucleotide (NMN), a product of the Nampt reaction. A high concentration of NMN is present in mouse plasma, and plasma eNampt and NMN levels are reduced in Nampt heterozygous females. Our results demonstrate that Nampt-mediated systemic NAD biosynthesis is critical for β cell function, suggesting a vital framework for the regulation of glucose homeostasis.