We have investigated the in vitro effects of the saturated free fatty acid palmitate on mouse pancreatic -cells by a combination of electrophysiological recordings, intracellular Ca²⁺ ([Ca²⁺]_i) microfluorimetry and insulin release measurements. Addition of palmitate (1 mM, bound to fatty acid-free albumin) to intact islets exposed to 15 mM glucose increased the [Ca²⁺]_i by 30% and insulin secretion 2-fold. Palmitate remained capable of increasing [Ca²⁺]_i and insulin release in the presence of tolbutamide and in islets depolarised by high K⁺ in combination with diazoxide, indicating that the stimulation occurs independently of closure of ATP-regulated K⁺ channels (K_ATP channels). Palmitate (0.5 mM) augmented exocytosis (measured as an increase in cell capacitance) in single -cells and increased the size of the readily releasable pool (RRP) of granules 2-fold. Whole-cell peak Ca²⁺ currents rose by 25% following addition of 0.5 mM palmitate, an effect that was abolished in the presence of 10 µM isradipine indicating that the FFA specifically act on L-type Ca²⁺ channels. The actions of palmitate on exocytosis and Ca²⁺ currents were not mimicked by intracellular application of palmitoyl-CoA. We conclude that palmitate increases insulin secretion by a K_ATP channel-independent mechanism exerted at the level of exocytosis and that involves both augmentation of L-type Ca²⁺ currents and an increased size of RRP.