Pancreatic muscarinic acetylcholine receptors play an important role in stimulating insulin and glucagon secretion from islet cells. To study the potential role of the M3 muscarinic receptor subtype in cholinergic stimulation of insulin release, we initially examined the effect of the muscarinic agonist, oxotremorine-M (Oxo-M), on insulin secretion from isolated pancreatic islets prepared from wild-type (WT) and M3 receptor-deficient mice (M3+/− and M3−/− mice). At a stimulatory glucose level (16.7 mmol/l), Oxo-M strongly potentiated insulin output from islets of WT mice. Strikingly, this effect was completely abolished in islets from M3−/− mice and significantly reduced in islets from M3+/− mice. Additional in vitro studies showed that Oxo-M-mediated glucagon release was also virtually abolished in islets from M3−/− mice. Consistent with the in vitro data, in vivo studies showed that M3−/− mice displayed reduced serum insulin and plasma glucagon levels and a significantly blunted increase in serum insulin after an oral glucose load. Despite the observed impairments in insulin release, M3−/− mice showed significantly reduced blood glucose levels and even improved glucose tolerance, probably due to the reduction in plasma glucagon levels and the fact that M3−/− mice are hypophagic and lean. These findings provide important new insights into the metabolic roles of the M3 muscarinic receptor subtype.