ATP-sensitive potassium (KATP) channels play a key role in the regulation of insulin secretion by coupling glucose metabolism to the electrical activity of pancreatic β-cells. To generate an electric signal of suitable magnitude, the plasma membrane of the β-cell must contain an appropriate number of channels. An inadequate number of channels can lead to congenital hyperinsulinism, whereas an excess of channels can result in the opposite condition, neonatal diabetes. KATP channels are made up of four subunits each of Kir6.2 and the sulphonylurea receptor (SUR1), encoded by the genes KCNJ11 and ABCC8, respectively. Following synthesis, the subunits must assemble into an octameric complex to be able to exit the endoplasmic reticulum and reach the plasma membrane. While this biosynthetic pathway ensures supply of channels to the cell surface, an opposite pathway, involving clathrin-mediated endocytosis, removes channels back into the cell. The balance between these two processes, perhaps in conjunction with endocytic recycling, would dictate the channel density at the cell membrane. In this review, we discuss the molecular signals that contribute to this balance, and how an imbalance could lead to a disease state such as neonatal diabetes.