Transgenic mice with elevated levels of beta-cell calmodulin develop severe diabetes even though pancreatic beta-cells contain reserve levels of insulin. Electron microscopic examination of transgenic pancreas confirmed the presence of abundant insulin secretory granules and failed to reveal obvious morphological abnormalities. These observations suggested that excess calmodulin may specifically impair the secretory process. To directly assess the effect of excess calmodulin on beta-cell function we have isolated pancreatic islets from transgenic animals. Transgenic islets from 6- to 8-day-old mice used 40% less glucose than normal islets and contained 58% of the normal insulin content, 90% of the normal glucagon content, and 5-fold higher levels of calmodulin than islets from control mice of the same age. Parallel perifusions of normal and transgenic islets confirmed that excess calmodulin inhibited glucose-stimulated insulin secretion; first phase secretion was reduced by 60%, and second phase secretion was essentially absent. Static assays were performed to assess the response to other secretagogues. All fuel secretagogues tested were ineffective in stimulating insulin secretion from transgenic islets. Secretion in response to depolarizing levels of potassium was also severely impaired. The phosphodiesterase inhibitor 3-isobutyl-1-methyl-xanthine increased transgenic secretion, but not to the level obtained in normal islets. Of the compounds examined, only phorbol 12-myristate 13-acetate and carbachol, two substances thought to act in beta-cells by stimulation of protein kinase-C, produced equivalent secretion in normal and transgenic islets. Phorbol 12-myristate 13-acetate also appeared to restore second phase secretion in transgenic islets. These results indicate that the initial period of calmodulin-induced diabetes is due to a secretory defect. This defect appears to be distal to membrane depolarization and is selective for the second phase of insulin secretion.