The ATP-sensitive potassium (K(ATP)) channel controls insulin secretion by coupling glucose metabolism to excitability of the pancreatic beta-cell membrane. The channel comprises four subunits each of Kir6.2 and the sulphonylurea receptor (SUR1), encoded by KCNJ11 and ABCC8, respectively. Mutations in these genes that result in reduced activity or expression of K(ATP) channels lead to enhanced beta-cell excitability, insulin hypersecretion and hypoglycaemia, and in humans lead to the clinical condition congenital hyperinsulinism (CHI). Here we have investigated the molecular basis of the focal form of CHI caused by one such mutation in Kir6.2, E282K. The study led to the discovery that Kir6.2 contains a di-acidic ER exit signal, (280)DLE(282), which promotes concentration of the channel into COPII-enriched ER exit sites prior to ER export via a process that requires Sar1-GTPase. The E282K mutation abrogates the exit signal, and thereby prevents the ER export and surface expression of the channel. When co-expressed, the mutant subunit was able to associate with the wild-type Kir6.2 and form functional channels. Thus unlike most mutations, the E282K mutation does not cause protein mis-folding. Since in focal CHI, maternal chromosome containing the K(ATP) channel genes is lost, beta-cells of the patient would lack wild-type Kir6.2 to rescue the mutant Kir6.2 subunit expressed from the paternal chromosome. The resultant absence of functional K(ATP) channels leads to insulin hypersecretion. Taken together, we conclude that surface expression of K(ATP) channels is critically dependent on the Sar1-GTPase-dependent ER exit mechanism and abrogation of the di-acidic ER exit signal leads to CHI.