Neonatal diabetes is a rare monogenic form of diabetes that usually presents within the first six months of life. It is commonly caused by gain-of-function mutations in the genes encoding the Kir6.2 and SUR1 subunits of the plasmalemmal ATP-sensitive K⁺ (K_ATP) channel. To better understand this disease, we generated a mouse expressing a Kir6.2 mutation (V59M) that causes neonatal diabetes in humans and we used Cre-lox technology to express the mutation specifically in pancreatic β cells. These β-V59M mice developed severe diabetes soon after birth, and by 5 weeks of age, blood glucose levels were markedly increased and insulin was undetectable. Islets isolated from β-V59M mice secreted substantially less insulin and showed a smaller increase in intracellular calcium in response to glucose. This was due to a reduced sensitivity of K_ATP channels in pancreatic β cells to inhibition by ATP or glucose. In contrast, the sulfonylurea tolbutamide, a specific blocker of K_ATP channels, closed K_ATP channels, elevated intracellular calcium levels, and stimulated insulin release in β-V59M β cells, indicating that events downstream of K_ATP channel closure remained intact. Expression of the V59M Kir6.2 mutation in pancreatic β cells alone is thus sufficient to recapitulate the neonatal diabetes observed in humans. β-V59M islets also displayed a reduced percentage of β cells, abnormal morphology, lower insulin content, and decreased expression of Kir6.2, SUR1, and insulin mRNA. All these changes are expected to contribute to the diabetes of β-V59M mice. Their cause requires further investigation.