Glucagon-secreting pancreatic α-cells play pivotal roles in the development of diabetes. Glucagon promotes insulin secretion from β-cells. However, the long-term effect of glucagon on the function and phenotype of β-cells had remained elusive. In this study, we found long-term intervention of glucagon or glucagon intervention with the presence of palmitic acid downregulated the β-cell specific markers, and inhibited insulin secretion in cultured β-cells. These results suggested that glucagon induced β-cell dedifferentiation under pathological conditions. Glucagon blockage by a glucagon receptor (GCGR) monoclonal antibody (mAb) attenuated glucagon-induced β-cell dedifferentiation. In primary islets, GCGR mAb treatment upregulated β-cell specific markers and increased insulin content, suggesting that blockage of endogenous glucagon inhibited β-cell dedifferentiation. To investigate the possible mechanism, we found glucagon decreased FoxO1 expression. FoxO1 inhibitor mimicked the effect of glucagon, while FoxO1 overexpression reversed the glucagon-induced β-cell dedifferentiation. In db/db mice and β-cell lineage-tracing diabetic mice, GCGR mAb lowered glucose level, upregulated plasma insulin level, increased β-cell area and inhibited β-cell dedifferentiation. In the aged β-cell specific FoxO1 knockout mice (with the blood glucose level elevated as a diabetic model), the glucose-lowering effect of GCGR mAb was attenuated, and the plasma insulin level, β-cell area and β-cell dedifferentiation was not affected by GCGR mAb. Our results proved that glucagon induced β-cell dedifferentiation under pathological conditions, and the effect was partially mediated by FoxO1. Our study reveals a novel crosstalk between α- and β-cells, and is helpful to understand the pathophysiology of diabetes and discover new targets for the diabetes treatment.