ATP-sensitive potassium (K_ATP) channels are metabolic sensors that couple the metabolic state of the cell to the electrical activity of the plasma membrane. They play important roles in a wide range of cell types, including neurones, muscle and endocrine tissue, and in pancreatic beta-cells they are involved in insulin secretion. Gain-of-function mutations in the genes encoding both the pore-forming Kir6.2 (KCNJ11) and regulatory SUR1 (ABCC8) subunits cause neonatal diabetes (ND). Some gain-of-function mutations produce a severe clinical phenotype, characterized by motor and mental developmental delay, epilepsy, muscle weakness and neonatal diabetes (DEND syndrome). All ND mutations impair the ability of cell metabolism to close the K_ATP channel, either by reducing the inhibitory effect of ATP (at Kir6.2) or by enhancing the stimulatory effects of Mg-nucleotides (MgATP, MgADP). In many patients, sulphonylurea drugs (which close K_ATP channels) can be successfully used to treat their diabetes, and in some individuals the neurological symptoms are also partially alleviated. This lecture will show how knowledge of K_ATP function has led to new therapy for patients with neonatal diabetes and conversely how identification of disease-causing mutations has illuminated our understanding of K_ATP channel function. It will discuss the mechanisms by which nucleotides modulate K_ATP channel activity, how mutations causing human disease alter K_ATP channel function, how alterations in K_ATP channel activity cause the disease phenotype in man and mouse, and why some mutations are susceptible to sulphonylurea therapy and others are not. The extent to which mouse models of ND recapitulate the human phenotype will also be considered.