Prolonged exposure to elevated FFA levels has been shown to induce peripheral insulin resistance and to alter the beta-cell secretory response to glucose. To investigate the effects of FFAs on preproinsulin gene expression, we measured insulin release, cell content, and messenger RNA (mRNA) levels in rat islets after a 24-h exposure to 1 mM palmitate. Insulin release increased at all glucose concentrations studied; in contrast, preproinsulin mRNA levels were specifically reduced by palmitate at high glucose with a decrease in insulin stores, suggesting that palmitate inhibits the glucose-stimulated increase in preproinsulin gene expression. The mechanisms by which palmitate affects preproinsulin gene expression implicate both preproinsulin mRNA stability and transcription, as suggested by an actinomycin D decay assay, quantification of primary preproinsulin transcripts, and transient transfection experiments in Min6 cells. Metabolism of palmitate is not required to obtain these effects, inasmuch as they can be reproduced by 2-bromopalmitate. However, oleate and linoleate did not significantly influence preproinsulin mRNA levels. We conclude that insulin release and preproinsulin gene expression are not coordinately regulated by palmitate and that chronically elevated FFA levels may interfere with beta-cell function and be implicated in the development of noninsulin-dependent diabetes.