Pancreatic β-cells secrete insulin in response to metabolic and hormonal signals to maintain glucose homeostasis. Insulin secretion is under the control of ATP-sensitive potassium (KATP) channels that play key roles in setting β-cell membrane potential. Leptin, a hormone secreted by adipocytes, inhibits insulin secretion by increasing KATP channel conductance in β-cells. We investigated the mechanism by which leptin increases KATP channel conductance. We show that leptin causes a transient increase in surface expression of KATP channels without affecting channel gating properties. This increase results primarily from increased channel trafficking to the plasma membrane rather than reduced endocytosis of surface channels. The effect of leptin on KATP channels is dependent on the protein kinases AMP-activated protein kinase (AMPK) and PKA. Activation of AMPK or PKA mimics and inhibition of AMPK or PKA abrogates the effect of leptin. Leptin activates AMPK directly by increasing AMPK phosphorylation at threonine 172. Activation of PKA leads to increased channel surface expression even in the presence of AMPK inhibitors, suggesting AMPK lies upstream of PKA in the leptin signaling pathway. Leptin signaling also leads to F-actin depolymerization. Stabilization of F-actin pharmacologically occludes, whereas destabilization of F-actin simulates, the effect of leptin on KATP channel trafficking, indicating that leptin-induced actin reorganization underlies enhanced channel trafficking to the plasma membrane. Our study uncovers the signaling and cellular mechanism by which leptin regulates KATP channel trafficking to modulate β-cell function and insulin secretion.