In children with obesity, insulin hypersecretion is proposed to precede insulin resistance. We investigated if metformin could be used to attenuate insulin secretion from palmitate-treated isolated islets and its implication for children with obesity. Human islets were exposed to palmitate for 0.5 or 1 day, when metformin was introduced. After culture, glucose-stimulated insulin secretion (GSIS) was measured. Children with obesity, who had received metformin for over six months (n = 21, age 13.9 ± 1.8), were retrospectively evaluated. Children were classified as either “reducing” or “increasing” based on the difference between AUC0–120 of insulin during OGTT before and after metformin treatment. In human islets, GSIS increased after culture in palmitate for up to 1 day but declined with continued palmitate exposure. Whereas adding metformin after 1 day of palmitate exposure increased GSIS, adding metformin after 0.5 days reduced GSIS. In children with “reducing” insulin AUC0–120 (n = 9), 2 h glucose and triglycerides decreased after metformin treatment, which was not observed in patients with “increasing” insulin AUC0–120 (n = 12). In isolated islets, metformin attenuated insulin hypersecretion if introduced when islet secretory capacity was maintained. In children with obesity, improved glycemic and lipid levels were accompanied by reduced insulin levels during OGTT after metformin treatment.