Loss-of-function mutations in the KATP channel genes KCNJ11 and ABCC8 cause neonatal hyperinsulinism in humans. Dominantly inherited mutations cause less severe disease, which may progress to glucose intolerance and diabetes in later life (e.g., SUR1-E1506K). We generated a mouse expressing SUR1-E1506K in place of SUR1. KATP channel inhibition by MgATP was enhanced in both homozygous (homE1506K) and heterozygous (hetE1506K) mutant mice, due to impaired channel activation by MgADP. As a consequence, mutant β-cells showed less on-cell KATP channel activity and fired action potentials in glucose-free solution. HomE1506K mice exhibited enhanced insulin secretion and lower fasting blood glucose within 8 weeks of birth, but reduced insulin secretion and impaired glucose tolerance at 6 months of age. These changes correlated with a lower insulin content; unlike wild-type or hetE1506K mice, insulin content did not increase with age in homE1506K mice. There was no difference in the number and size of islets or β-cells in the three types of mice, or evidence of β-cell proliferation. We conclude that the gradual development of glucose intolerance in patients with the SUR1-E1506K mutation might, as in the mouse model, result from impaired insulin secretion due a failure of insulin content to increase with age.