The functional role of glutamate decarboxylase (GAD) and its product GABA in pancreatic islets has remained elusive. Mouse β-cells express the larger isoform GAD67, whereas human islets express only the smaller isoform GAD65. We have generated two lines of transgenic mice expressing human GAD65 in pancreatic β-cells (RIP7-hGAD65, Lines 1 and 2) to study the effect that GABA generated by this isoform has on islet cell function. The ascending order of hGAD65 expression and/or activity in β-cells was Line 1 heterozygotes < Line 2 heterozygotes < Line 1 homozygotes. Line 1 heterozygotes have normal glucose tolerance, whereas Line 1 homozygotes and Line 2 heterozygotes exhibit impaired glucose tolerance and inhibition of insulin secretion in vivo in response to glucose. In addition, fasting levels of blood glucose are elevated and insulin is decreased in Line 1 homozygotes. Pancreas perfusion experiments suggest that GABA generated by GAD65 may function as a negative regulator of first-phase insulin secretion in response to glucose by affecting a step proximal to or at the KATP +channel.