Glucagon, secreted by pancreatic islet α cells, is the principal hyperglycemic hormone. In diabetes, glucagon secretion is not suppressed at high glucose, exacerbating the consequences of insufficient insulin secretion, and is inadequate at low glucose, potentially leading to fatal hypoglycemia. The causal mechanisms remain unknown. Here we show that α cell K ATP-channel activity is very low under hypoglycemic conditions and that hyperglycemia, via elevated intracellular ATP/ADP, leads to complete inhibition. This produces membrane depolarization and voltage-dependent inactivation of the Na+ channels involved in action potential firing that, via reduced action potential height and Ca2+ entry, suppresses glucagon secretion. Maneuvers that increase KATP channel activity, such as metabolic inhibition, mimic the glucagon secretory defects associated with diabetes. Low concentrations of the KATP channel blocker tolbutamide partially restore glucose-regulated glucagon secretion in islets from type 2 diabetic organ donors. These data suggest that impaired metabolic control of the KATP channels underlies the defective glucose regulation of glucagon secretion in type 2 diabetes.