ATP-sensitive K+ channels (KATP channels) couple β-cell metabolism to electrical activity and thereby play an essential role in the control of insulin secretion. Gain-of-function mutations in Kir6.2 (KCNJ11), the pore-forming subunit of this channel, cause neonatal diabetes. We investigated the effect of the most common neonatal diabetes mutation (R201H) on β-cell electrical activity and insulin secretion by stable transfection in the INS-1 cell line. Expression was regulated by placing the gene under the control of a tetracycline promoter. Transfection with wild-type Kir6.2 had no effect on the ATP sensitivity of the KATP channel, whole-cell KATP current magnitude, or insulin secretion. However, induction of Kir6.2-R201H expression strongly reduced KATP channel ATP sensitivity (the half-maximal inhibitory concentration increased from ∼20 μmol/l to ∼2 mmol/l), and the metabolic substrate methyl succinate failed to close KATP channels or stimulate electrical activity and insulin secretion. Thus, these results directly demonstrate that Kir6.2 mutations prevent electrical activity and insulin release from INS-1 cells by increasing the KATP current and hyperpolarizing the β-cell membrane. This is consistent with the ability of the R201H mutation to cause neonatal diabetes in patients. The relationship between KATP current and the membrane potential reveals that very small changes in current amplitude are sufficient to prevent hormone secretion.