We have studied interacting and noninteracting quantum degenerate Fermi gases in a three-dimensional optical lattice. We directly image the Fermi surface of the atoms in the lattice by turning off the optical lattice adiabatically. Because of the confining potential, gradual filling of the lattice transforms the system from a normal state into a band insulator. The dynamics of the transition from a band insulator to a normal state is studied, and the time scale is measured to be an order of magnitude larger than the tunneling time in the lattice. Using a Feshbach resonance, we increase the interaction between atoms in two different spin states and dynamically induce a coupling between the lowest energy bands. We observe a shift of this coupling with respect to the Feshbach resonance in free space which is anticipated for strongly confined atoms.