Persistent hyperinsulinemic hypoglycemia of infancy (PHHI) is a neonatal disease characterized by dysregulation of insulin secretion accompanied by profound hypoglycemia. We have discovered that islet cells, isolated from the pancreas of a PHHI patient, proliferate in culture while maintaining a beta cell-like phenotype. The PHHI-derived cell line (NES2Y) exhibits insulin secretory characteristics typical of islet cells derived from these patients, i.e. they have no K(ATP) channel activity and as a consequence secrete insulin at constitutively high levels in the absence of glucose. In addition, they exhibit impaired expression of the homeodomain transcription factor PDX1, which is a key component of the signaling pathway linking nutrient metabolism to the regulation of insulin gene expression. To repair these defects NES2Y cells were triple-transfected with cDNAs encoding the two components of the K(ATP) channel (SUR1 and Kir6.2) and PDX1. One selected clonal cell line (NISK9) had normal K(ATP) channel activity, and as a result of changes in intracellular Ca(2+) homeostasis ([Ca(2+)](i)) secreted insulin within the physiological range of glucose concentrations. This approach to engineering PHHI-derived islet cells may be of use in gene therapy for PHHI and in cell engineering techniques for administering insulin for the treatment of diabetes mellitus.