<jats:p> Peptide hormones are first produced as larger precursor prohormones that require endoproteolytic cleavage to liberate the mature hormones. A structurally conserved but functionally distinct family of nine prohormone convertase enzymes (PCs) are responsible for cleavage of protein precursors, of which PC1/3 and PC2 are known to be exclusive to neuroendocrine cells and responsible for prohormone cleavage. Differential expression of PCs within tissues defines prohormone processing; whereas glucagon is the major product liberated from proglucagon via PC2 in pancreatic α-cells, proglucagon is preferentially processed by PC1/3 in intestinal L cells to produce glucagon-like peptides 1 and 2 (GLP-1, GLP-2). Beyond our understanding of processing of islet prohormones in healthy islets, there is convincing evidence that proinsulin, pro-islet amyloid polypeptide (proIAPP), and proglucagon processing is altered during prediabetes and diabetes. There is predictive value of elevated circulating proinsulin or proinsulin-to-C-peptide ratio for progression to type 2 diabetes, and elevated proinsulin or proinsulin-to-C-peptide ratio is predictive for development of type 1 diabetes in at-risk groups. After onset of diabetes, patients have elevated circulating proinsulin and proIAPP, and proinsulin may be an autoantigen in type 1 diabetes. Furthermore, preclinical studies reveal that α-cells have altered proglucagon processing during diabetes, leading to increased GLP-1 production. We conclude that despite strong associative data, current evidence is inconclusive on the potential causal role of impaired prohormone processing in diabetes and suggest that future work should focus on resolving the question of whether altered prohormone processing is a causal driver or merely a consequence of diabetes pathology. </jats:p>