Aims/hypothesis Congenital hyperinsulinism caused by mutations in the K ATP -channel-encoding genes (K ATP HI) is a potentially life-threatening disorder of the pancreatic beta cells. No optimal medical treatment is available for patients with diazoxide-unresponsive diffuse K ATP HI. Therefore, we aimed to create a model of K ATP HI using patient induced pluripotent stem cell (iPSC)-derived islets. Methods We derived iPSCs from a patient carrying a homozygous ABCC8 V187D mutation, which inactivates the sulfonylurea receptor 1 (SUR1) subunit of the K ATP -channel. CRISPR-Cas9 mutation-corrected iPSCs were used as controls. Both were differentiated to stem cell-derived islet-like clusters (SC-islets) and implanted into NOD-SCID gamma mice. Results SUR1-mutant and -corrected iPSC lines both differentiated towards the endocrine lineage, but SUR1-mutant stem cells generated 32% more beta-like cells (SC-beta cells) (64.6% vs 49.0%, p  = 0.02) and 26% fewer alpha-like cells (16.1% vs 21.8% p  = 0.01). SUR1-mutant SC-beta cells were 61% more proliferative (1.23% vs 0.76%, p  = 0.006), and this phenotype could be induced in SUR1-corrected cells with pharmacological K ATP -channel inactivation. The SUR1-mutant SC-islets secreted 3.2-fold more insulin in low glucose conditions (0.0174% vs 0.0054%/min, p  = 0.0021) and did not respond to K ATP -channel-acting drugs in vitro. Mice carrying grafts of SUR1-mutant SC-islets presented with 38% lower fasting blood glucose (4.8 vs 7.7 mmol/l, p  = 0.009) and their grafts failed to efficiently shut down insulin secretion during induced hypoglycaemia. Explanted SUR1-mutant grafts displayed an increase in SC-beta cell proportion and SC-beta cell nucleomegaly, which was independent of proliferation. Conclusions/interpretation We have created a model recapitulating the known pathophysiology of K ATP HI both in vitro and in vivo. We have also identified a novel role for K ATP -channel activity during human islet development. This model will enable further studies for the improved understanding and clinical management of K ATP HI without the need for primary patient tissue. Graphical abstract