Kisspeptin and the G protein-coupled receptor 54 (GPR54) are highly abundant in the pancreas. In addition, circulating kisspeptin directly influences insulin secretion through GPR54. However, the mechanisms by which kisspeptin affects insulin release are unclear. The LIM-homeodomain transcription factor, Isl-1, is expressed in all pancreatic islet cells and is involved in regulating both islet development and insulin secretion. We therefore investigated potential interactions between kisspeptin and Isl-1. Our results demonstrate that Isl-1 and GPR54 are coexpressed in mouse pancreatic islet β-cells and NIT cells. Both in vitro and in vivo results demonstrate that kisspeptin-54 (KISS-54) inhibits Isl-1 expression and insulin secretion and both the in vivo and in vitro effects of KISS-54 on insulin gene expression and secretion are abolished when an Isl-1-inducible knockout model is used. Moreover, our results demonstrate that the direct action of KISS-54 on insulin secretion is mediated by Isl-1. Our results further show that KISS-54 influences Isl-1 expression and insulin secretion through the protein kinase C-ERK1/2 pathway. Conversely, insulin has a feedback loop via the Janus kinase-phosphatidylinositol 3-kinase pathway regulating kisspeptin expression and secretion. These findings are important in understanding mechanisms of insulin secretion and metabolism in diabetes.