Thioredoxin-interacting protein (TXNIP) regulates critical biological processes including inflammation, stress and apoptosis. TXNIP is upregulated by glucose and is a critical mediator of hyperglycemia-induced beta-cell apoptosis in diabetes. In contrast, the saturated long-chain fatty acid palmitate, although toxic to the beta-cell, inhibits TXNIP expression. The mechanisms involved in the opposing effects of glucose and fatty acids on TXNIP expression are unknown. We found that both palmitate and oleate inhibited TXNIP in a rat beta-cell line and islets. Palmitate inhibition of TXNIP was independent of fatty acid beta-oxidation or esterification. AMP-activated protein kinase (AMPK) has an important role in cellular energy sensing and control of metabolic homeostasis; therefore we investigated its involvement in nutrient regulation of TXNIP. As expected, glucose inhibited whereas palmitate stimulated AMPK. Pharmacologic activators of AMPK mimicked fatty acids by inhibiting TXNIP. AMPK knockdown increased TXNIP expression in presence of high glucose with and without palmitate, indicating that nutrient (glucose and fatty acids) effects on TXNIP are mediated in part via modulation of AMPK activity. TXNIP is transcriptionally regulated by carbohydrate response element-binding protein (ChREBP). Palmitate inhibited glucose-stimulated ChREBP nuclear entry and recruitment to the Txnip promoter, thereby inhibiting Txnip transcription. We conclude that AMPK is an important regulator of Txnip transcription via modulation of ChREBP activity. The divergent effects of glucose and fatty acids on TXNIP expression result in part from their opposing effects on AMPK activity. In light of the important role of TXNIP in beta-cell apoptosis, its inhibition by fatty acids can be regarded as an adaptive/protective response to glucolipotoxicity. The finding that AMPK mediates nutrient regulation of TXNIP may have important implications for the pathophysiology and treatment of diabetes.