Neonatal diabetes, diagnosed as severe hyperglycaemia within the first 6 months of life, is often caused by gain-of-function mutations in the KATP channel subunit, Kir6.2. Using a conditional transgenic mouse model selectively expressing the Kir6.2-V59M mutation exclusively in pancreatic β-cells (iβ-V59M), we investigated the effect of hyperglycaemia on pancreatic function. Gene expression was induced at 12 weeks of age and resulted in severe hyperglycaemia within 2 days (control: 6.0±0.1mM vs. iβ-V59M: 23.7±1.0mM). After 4 weeks, blood glucose was 26.2±0.5mM and postprandial serum insulin had decreased (control: 0.6±0.3pM vs. iβ-V59M: 0.1±0.03pM) but no changes in serum glucagon levels were detected (73.5±2.4pM vs. 80.8±21.5pM). Glucose tolerance was impaired and glucagon sensitivity increased in iβ-V59M mice as assessed using an intraperitoneal glucose and glucagon tolerance test, respectively. Four-week exposure to hyperglycaemia resulted in a ~3-fold reduction in total pancreatic islet area from 17.5±2.6µm2x10-5 (controls) to 5.3±0.8µm2x10-5 (iβ-V59M). The remaining islets were predominantly composed of glucagon-positive cells; the percentage of islet area composed of glucagon-positive cells increased from 16.6±0.9% (controls) to 73.5±2.1% (iβ-V59M). This was accompanied by a marked reduction in insulin-positive cells (control 86.5±0.3% vs. iβ-V59M 27.8±1.7%). iβ-V59M mice were implanted subcutaneously with a high-dose, slow-release pellet (17mg/kg/day) of the sulphonylurea glibenclamide, which closes KATP channels. Within 2 days of implantation, blood glucose had returned to control levels (6.1±0.1mM) and remained stable for 4 weeks. Glibenclamide therapy improved glucose tolerance, but did not restore it to that of control mice. However, it prevented the reduction in islet area and changes in insulin/glucagon-positive cell number. Gain-of function mutations in β-cell Kir6.2 subunits result in hyperglycaemia, hypoinsulinemia and alterations in glucose tolerance, glucagon sensitivity and islet cell morphology. These effects can be prevented, in part, by glibenclamide therapy. Therefore, iβ-V59M provides a good model to study the effects of hyperglycaemia on pancreatic function.