Long-term (72 hr) exposure of pancreatic islets to palmitate inhibited glucose-induced insulin secretion by >50% with first- and second-phase secretion being equally suppressed. This inhibition correlated with the selective impairment of exocytosis evoked by brief (action potential-like) depolarizations, whereas that evoked by long ( approximately 250 ms) stimuli was unaffected. Under normal conditions, Ca(2+) influx elicited by brief membrane depolarizations increases [Ca(2+)](i) to high levels within discrete microdomains and triggers the exocytosis of closely associated insulin granules. We found that these domains of localized Ca(2+) entry become dispersed by long-term (72 hr), but not by acute (2 hr), exposure to palmitate. Importantly, the release competence of the granules was not affected by palmitate. Thus, the location rather than the magnitude of the Ca(2+) increase determines its capacity to evoke exocytosis. In both mouse and human islets, the palmitate-induced secretion defect was reversed when the beta cell action potential was pharmacologically prolonged.