Doping Bi2Sr2Ca1Cu2O8+y with Co causes a superconductor-insulator transition. We study correlations between changes in the electrical resistivity rho(ab)(T) and the electronic bandstructure using identical single crystalline samples. For undoped samples the resistivity is linear in temperature and has a vanishing residual resistivity. In angle resolved photoemission these samples show dispersing band-like states. Co-doping decreases Te and causes and increase in the residual resistivity. Above a threshold Co-concentration the resistivity is metallic (d rho(ab)/dT > 0) at room temperature, turns insulating below a characteristic temperature T-min and becomes superconducting at even lower temperature. These changes in the resistivity correlate with the disappearance of the dispersing band-like states in angle resolved photoemission. We show that Anderson localization caused by the impurity potential of the doped Co-atoms provides a consistent explanation of all experimental features. The coexistance of insulating (d rho(ab)/dT < 0) normal state behavior and superconductivity indicates that the superconducting ground state is formed out of spatially almost localized carriers.