Impairment of pancreatic β-cell function is a primary etiology of type 2 diabetes mellitus (T2DM). The sulfated manno-glucuronan (GMn) was found to possess a backbone structure consisting of interspersing 1, 3-linked β-D-Glc p A residues and alternating 1, 2-linked α-D-Man p residues and 1, 4-linked β-D-Glc p A residues. Additionally, random sulfation occurs at the C6 position of the Man residues. GMn demonstrated no detectable cytotoxicity in MIN6 cells and attenuated palmitic acid (PA)-induced decreases in cell viability in a dose-dependent manner. Furthermore, GMn effectively reversed PA-impaired glucose-stimulated insulin secretion (GSIS) in a dose-dependent manner in both MIN6 cells and primary mouse islets. In vivo, GMn treatment significantly attenuated glycemic levels in high-fat diet/streptozotocin-induced type 2 diabetic mice, elevated β-cell insulin content, and decreased the proportions of α-, δ-, and pancreatic polypeptide (PP)-cells. Mechanistically, GMn significantly suppressed aldehyde dehydrogenase 1A3 (ALDH1A3)-mediated retinol metabolism and increased the expression of key β-cell identity/function markers, including PDX1, NKX6.1, MAFA, and NeuroD1, in pancreatic islets. Consistently, in vitro studies demonstrated that GMn counteracted PA-induced upregulation of ALDH1A3, while promoting the expression of the same set of β-cell transcription factors. Collectively, these findings indicate that GMn may enhance β-cell proliferation and reduces β-cell differentiation by downregulating ALDH1A3 expression.