Prolonged exposure to elevated levels of fatty acids adversely affects pancreatic beta-cell function. Here we investigated 1) whether ceramide synthesis, which we reported to mediate fatty acid inhibition of insulin gene expression, also inhibits insulin secretion and 2) whether fatty acid inhibition of insulin secretion involves the generation of reactive oxygen species (ROS), nitric oxide (NO), or prostaglandin E(2) (PGE(2)). A 72-h culture of islets in the presence of palmitate or oleate resulted in a marked decrease in glucose-induced insulin release assessed in 1-h static incubations. This effect was reproduced by exogenous diacylglycerol, but not by a cell-permeable analog of ceramide. Culture in the presence of fatty acids was not associated with an increase in intracellular peroxide or NO levels, neither was insulin secretion restored by antioxidants or an inhibitor of NO production. Exposure to fatty acids led to an increase in PGE(2) release, but an inhibitor of cyclooxygenase 2 was unable to prevent fatty acid inhibition of insulin secretion. These results indicate that fatty acid inhibition of insulin secretion 1) is not mediated by de novo ceramide synthesis, ROS, NO, or PGE(2), and 2) is likely to be caused by the generation of signals or metabolites downstream of diacylglycerol.