Insulin is known to regulate pancreatic β-cell function through the activation of cell surface insulin receptors, phosphorylation of insulin receptor substrate (IRS)-1 and -2, and activation of phosphatidylinositol (PI) 3-kinase. However, an acute effect of insulin in modulating β-cell electrical activity and its underlying ionic currents has not been reported. Using the perforated patch clamp technique, we found that insulin (1–600 nmol/l) but not IGF-1 (100 nmol/l) reversibly hyperpolarized single mouse β-cells and inhibited their electrical activity. The dose-response relationship for insulin yielded a maximal change (mean ± SE) in membrane potential of −13.6 ± 2.0 mV (P < 0.001) and a 50% effective dose of 25.9 ± 0.1 nmol/l (n = 63). Exposing patched β-cells within intact islets to 200 nmol/l insulin produced similar results, hyperpolarizing islets from −47.7 ± 3.3 to −65.6 ± 3.7 mV (P < 0.0001, n = 11). In single cells, insulin-induced hyperpolarization was associated with a threefold increase in whole-cell conductance from 0.6 ± 0.1 to 1.7 ± 0.2 nS (P < 0.001, n = 10) and a shift in the current reversal potential from −25.7 ± 2.5 to −63.7 ± 1.0 mV (P < 0.001 vs. control, n = 9; calculated K⁺ equilibrium potential = −90 mV). The effects of insulin were reversed by tolbutamide, which decreased cell conductance to 0.5 ± 0.1 nS and shifted the current reversal potential to −25.2 ± 2.3 mV. Insulin-induced β-cell hyperpolarization was sufficient to abolish intracellular calcium concentration ([Ca²⁺]_i) oscillations measured in pancreatic islets exposed to 10 mmol/l glucose. The application of 100 nmol/l wortmannin to inactivate PI 3-kinase, a key enzyme in insulin signaling, was found to reverse the effects of 100 nmol/l insulin. In cell-attached patches, single ATP-sensitive K⁺ (K_ATP) channels were activated by bath-applied insulin and subsequently inhibited by wortmannin. Our data thus demonstrate that insulin activates the K_ATP channels of single mouse pancreatic β-cells and islets, resulting in membrane hyperpolarization, an inhibition of electrical activity, and the abolition of [Ca²⁺]_i oscillations. We thus propose that locally released insulin might serve as a negative feedback signal within the islet under physiological conditions.