AMP-activated protein kinase (AMPK) has an important role in cellular energy homeostasis and has emerged as a promising target for treatment of Type 2 Diabetes (T2D) due to its beneficial effects on insulin sensitivity and glucose homeostasis. O304 is a pan-AMPK activator that has been shown to improve glucose homeostasis in both mouse models of diabetes and in human T2D subjects. Here, we describe the genome-wide transcriptional profile and chromatin landscape of pancreatic islets following O304 treatment of mice fed high-fat diet (HFD). O304 largely prevented genome-wide gene expression changes associated with HFD feeding in CBA mice and these changes were associated with remodelling of active and repressive chromatin marks. In particular, the increased expression of the β-cell stress marker Aldh1a3 in islets from HFD-mice is completely abrogated following O304 treatment, which is accompanied by loss of active chromatin marks in the promoter as well as distant non-coding regions upstream of the Aldh1a3 gene. Moreover, O304 treatment restored dysfunctional glucose homeostasis as well as expression of key markers associated with β-cell function in mice with already established obesity. Our findings provide preclinical evidence that O304 is a promising therapeutic compound not only for T2D remission but also for restoration of β-cell function following remission of T2D diabetes.