The ATP-sensitive K⁺ channel (K_ATP channel) senses metabolic changes in the pancreatic β-cell, thereby coupling metabolism to electrical activity and ultimately to insulin secretion. When K_ATP channels open, β-cells hyperpolarize and insulin secretion is suppressed. The prediction that K_ATP channel “overactivity” should cause a diabetic state due to undersecretion of insulin has been dramatically borne out by recent genetic studies implicating “activating” mutations in the Kir6.2 subunit of K_ATP channel as causal in human diabetes. This article summarizes the emerging picture of K_ATP channel as a major cause of neonatal diabetes and of a polymorphism in K_ATP channel (E23K) as a type 2 diabetes risk factor. The degree of K_ATP channel “overactivity” correlates with the severity of the diabetic phenotype. At one end of the spectrum, polymorphisms that result in a modest increase in K_ATP channel activity represent a risk factor for development of late-onset diabetes. At the other end, severe “activating” mutations underlie syndromic neonatal diabetes, with multiple organ involvement and complete failure of glucose-dependent insulin secretion, reflecting K_ATP channel “overactivity” in both pancreatic and extrapancreatic tissues.