Permanent neonatal diabetes mellitus is a rare form of insulin-requiring diabetes presenting within the first few weeks or months of life. Mutations in the insulin gene are the second most common cause of this form of diabetes. These mutations are located in critical regions of preproinsulin and are likely to prevent normal processing or folding of the preproinsulin/proinsulin molecule. To characterize these mutations, we transiently expressed proinsulin-GFP fusion proteins in MIN6 mouse insulinoma cells. Our study revealed three groups of mutant proteins: 1) mutations that result in retention of proinsulin in the endoplasmic reticulum (ER) and attenuation of secretion of cotransfected wild-type insulin: C43G, F48C, and C96Y; 2) mutations with partial ER retention, partial recruitment to granules, and attenuation of secretion of wild-type insulin: G32R, G32S, G47V, G90C, and Y108C; and 3) similar to (2) but with no significant attenuation of wild-type insulin secretion: A24D and R89C. The mutant insulin proteins do not prevent targeting of wild-type insulin to secretory granules, but most appear to lead to decreased secretion of wild-type insulin. Each of the mutants triggers the expression of the proapoptotic gene Chop, indicating the presence of ER stress.