In mutant INS gene–induced diabetes of youth (MIDY), characterized by insulin deficiency, MIDY proinsulin mutants misfold and fail to exit the endoplasmic reticulum (ER). Moreover, these mutants bind and block ER exit of wild-type (WT) proinsulin, inhibiting insulin production. The ultimate fate of ER-entrapped MIDY mutants is unclear, but previous studies implicated ER-associated degradation (ERAD), a pathway that retrotranslocates misfolded ER proteins to the cytosol for proteasomal degradation. Here we establish key ERAD machinery components used to triage the Akita proinsulin mutant, including the Hrd1-Sel1L membrane complex, which conducts Akita proinsulin from the ER lumen to the cytosol, and the p97 ATPase, which couples the cytosolic arrival of proinsulin with its proteasomal degradation. Surprisingly, we find that protein disulfide isomerase (PDI), the major protein oxidase of the ER lumen, engages Akita proinsulin in a novel way, reducing proinsulin disulfide bonds and priming the Akita protein for ERAD. Efficient PDI engagement of Akita proinsulin appears linked to the availability of Hrd1, suggesting that retrotranslocation is coordinated on the lumenal side of the ER membrane. We believe that, in principle, this form of diabetes could be alleviated by enhancing the targeting of MIDY mutants for ERAD to restore WT insulin production.