Insulin secretion from pancreatic β-cells is mediated by the opening of voltage-gated Ca²⁺ channels (Ca_V) and exocytosis of insulin dense core vesicles facilitated by the secretory soluble N-ethylmaleimide-sensitive factor attachment protein receptor protein machinery. We previously observed that β-cell exocytosis is sensitive to the acute removal of membrane cholesterol. However, less is known about the chronic changes in endogenous cholesterol and its biosynthesis in regulating β-cell stimulus-secretion coupling. We examined the effects of inhibiting endogenous β-cell cholesterol biosynthesis by using the squalene epoxidase inhibitor, NB598. The expression of squalene epoxidase in primary and clonal β-cells was confirmed by RT-PCR. Cholesterol reduction of 36–52% was observed in MIN6 cells, mouse and human pancreatic islets after a 48-h incubation with 10 μm NB598. A similar reduction in cholesterol was observed in the subcellular compartments of MIN6 cells. We found NB598 significantly inhibited both basal and glucose-stimulated insulin secretion from mouse pancreatic islets. Ca_V channels were markedly inhibited by NB598. Rapid photolytic release of intracellular caged Ca²⁺ and simultaneous measurements of the changes in membrane capacitance revealed that NB598 also inhibited exocytosis independently from Ca_V channels. These effects were reversed by cholesterol repletion. Our results indicate that endogenous cholesterol in pancreatic β-cells plays a critical role in regulating insulin secretion. Moreover, chronic inhibition of cholesterol biosynthesis regulates the functional activity of Ca_V channels and insulin secretory granule mobilization and membrane fusion. Dysregulation of cellular cholesterol may cause impairment of β-cell function, a possible pathogenesis leading to the development of type 2 diabetes.