Missense variants in KCNJ11 and ABCC8, which encode the KIR6.2 and SUR1 subunits of the β-cell KATP channel, have previously been implicated in type 2 diabetes, neonatal diabetes, and hyperinsulinemic hypoglycemia of infancy (HHI). To determine whether variation in these genes affects risk for type 2 diabetes or increased birth weight as a consequence of fetal hyperinsulinemia in Pima Indians, missense and common noncoding variants were analyzed in individuals living in the Gila River Indian Community. A R1420H variant in SUR1 (ABCC8) was identified in 3.3% of the population (N = 7,710). R1420H carriers had higher mean birth weights and a twofold increased risk for type 2 diabetes with a 7-year earlier onset age despite being leaner than noncarriers. One individual homozygous for R1420H was identified; retrospective review of his medical records was consistent with HHI and a diagnosis of diabetes at age 3.5 years. In vitro studies showed that the R1420H substitution decreases KATP channel activity. Identification of this loss-of-function variant in ABCC8 with a carrier frequency of 3.3% affects clinical care as homozygous inheritance and potential HHI will occur in 1/3,600 births in this American Indian population.