Glucose regulates pancreatic islet alpha-cell glucagon secretion directly by its metabolism to generate ATP in alpha-cells, and indirectly via stimulation of paracrine release of beta-cell secretory products, particularly insulin. How the cellular substrates of these pathways converge in the alpha-cell is not well known. We recently reported the use of the MIP-GFP (mouse insulin promoter-green fluorescent protein) mouse to reliably identify islet alpha- (non-green cells) and beta-cells (green cells), and characterized their ATP-sensitive K(+) (K(ATP)) channel properties, showing that alpha-cell K(ATP) channels exhibited a 5-fold higher sensitivity to ATP inhibition than beta-cell K(ATP) channels. Here, we show that insulin exerted paracrine regulation of alpha-cells by markedly reducing the sensitivity of alpha-cell K(ATP) channels to ATP (IC(50) = 0.18 and 0.50 mM in absence and presence of insulin, respectively). Insulin also desensitized beta-cell K(ATP) channels to ATP inhibition (IC(50) = 0.84 and 1.23 mM in absence and presence of insulin, respectively). Insulin effects on both islet cell K(ATP) channels were blocked by wortmannin, indicating that insulin acted on the insulin receptor-phosphatidylinositol 3-kinase signaling pathway. Insulin did not affect alpha-cell A-type K(+) currents. Glutamate, known to also inhibit alpha-cell glucagon secretion, did not activate alpha-cell K(ATP) channel opening. We conclude that a major mechanism by which insulin exerts paracrine control on alpha-cells is by modulating its K(ATP) channel sensitivity to ATP block. This may be an underlying basis for the proposed sequential glucose-insulin regulation of alpha-cell glucagon secretion, which becomes distorted in diabetes, leading to dysregulated glucagon secretion.