The insulin receptor signaling pathway is present in beta-cells and is believed to be important in beta-cell function. We show here that insulin directly regulates beta-cell function in isolated rodent islets. Long-term insulin treatment caused a sustained increase in [Ca(2+)](i) and enhanced glucose-stimulated insulin secretion in rat islets, but failed to increase insulin content. Chronic activation of insulin receptor signaling by IRS-1 overexpression in the beta-cell inhibited gene expression of SERCA3, an endoplasmic reticulum Ca(2+)-ATPase. Insulin gene transcription was stimulated by insulin receptor signaling and insulin mimetic compound (L-783 281) in a glucose- and Grb2-dependent manner. Thus, beta-cell SERCA3 is a target for insulin regulation, which implies that beta-cell Ca(2+) homeostasis is regulated in an autocrine feedback loop by insulin. This study identifies a novel regulatory pathway of insulin secretion at the molecular level with two main components: (1) regulation of intracellular Ca(2+) homeostasis via SERCA3 and (2) regulation of insulin gene expression.