Accumulation of intracellular lipid by pancreatic islet beta-cells has been proposed to inhibit normal glucose-regulated insulin secretion ('glucolipotoxicity'). In the present study, we determine whether over-expression in rat islets of the lipogenic transcription factor SREBP1c (sterol-regulatory-element-binding protein-1c) affects insulin release, and whether changes in islet lipid content may be reversed by activation of AMPK (AMP-activated protein kinase). Infection with an adenovirus encoding the constitutively active nuclear fragment of SREBP1c resulted in expression of the protein in approx. 20% of islet cell nuclei, with a preference for beta-cells at the islet periphery. Real-time PCR (TaqMan) analysis showed that SREBP1c up-regulated the expression of FAS (fatty acid synthase; 6-fold), acetyl-CoA carboxylase-1 (2-fold), as well as peroxisomal-proliferator-activated receptor-gamma (7-fold), uncoupling protein-2 (1.4-fold) and Bcl2 (B-cell lymphocytic-leukaemia proto-oncogene 2; 1.3-fold). By contrast, levels of pre-proinsulin, pancreatic duodenal homeobox-1, glucokinase and GLUT2 (glucose transporter isoform-2) mRNAs were unaltered. SREBP1c-transduced islets displayed a 3-fold increase in triacylglycerol content, decreased glucose oxidation and ATP levels, and a profound inhibition of glucose-, but not depolarisation-, induced insulin secretion. Culture of islets with the AMPK activator 5-amino-4-imidazolecarboxamide riboside decreased the expression of the endogenous SREBP1c and FAS genes, and reversed the effect of over-expressing active SREBP1c on FAS mRNA levels and cellular triacylglycerol content. We conclude that SREBP1c over-expression, even when confined to a subset of beta-cells, leads to defective insulin secretion from islets and may contribute to some forms of Type II diabetes.