The activity of G protein-coupled receptors is regulated via hyper-phosphorylation following agonist stimulation. Despite the universal nature of this regulatory process, the physiological impact of receptor phosphorylation remains poorly studied. To address this question, we have generated a knock-in mouse strain that expresses a phosphorylation-deficient mutant of the M(3)-muscarinic receptor, a prototypical G(q/11)-coupled receptor. This mutant mouse strain was used here to investigate the role of M(3)-muscarinic receptor phosphorylation in the regulation of insulin secretion from pancreatic islets. Importantly, the phosphorylation deficient receptor coupled to G(q/11)-signaling pathways but was uncoupled from phosphorylation-dependent processes, such as receptor internalization and β-arrestin recruitment. The knock-in mice showed impaired glucose tolerance and insulin secretion, indicating that M(3)-muscarinic receptors expressed on pancreatic islets regulate glucose homeostasis via receptor phosphorylation-/arrestin-dependent signaling. The mechanism centers on the activation of protein kinase D1, which operates downstream of the recruitment of β-arrestin to the phosphorylated M(3)-muscarinic receptor. In conclusion, our findings support the unique concept that M(3)-muscarinic receptor-mediated augmentation of sustained insulin release is largely independent of G protein-coupling but involves phosphorylation-/arrestin-dependent coupling of the receptor to protein kinase D1.