Pancreatic beta-cells metabolise both lipid and glucose nutrients but chronic exposure (>24 h) to elevated fatty acid (FA) concentrations results in deleterious metabolic and morphological changes. The aims of this study were to assess the adaptive morphological, metabolic and secretory responses of islet beta-cells to exposure and removal of FA. Isolated mouse islets and INS-1 beta-cells were exposed to oleate or palmitate (0.5 mM) or a 1:1 mixture of both FA for 48 h prior to a 24 h period without FA. Subsequent changes in lipid storage and composition (triglycerides, TG and phospholipids, PL), gene expression, beta-cell morphology and glucose-stimulated insulin secretion (GSIS) were determined. Intracellular TG content increased during exposure to FA and was lower in cells subsequently incubated in FA-free media (P < 0.05); TG storage was visible as oil red O positive droplets (oleate) by light microscopy or 'splits' (palmitate) by electron microscopy. Significant desaturation of beta-cell FA occurred after exposure to oleate and palmitate. After incubation in FA-free media, there was differential handling of specific FA in TG, resulting in a profile that tended to revert to that of control cells. FA treatment resulted in elevated lipolysis of intracellular TG, increased FA oxidation and reduced GSIS. After incubation in FA-free media, oxidation remained elevated but inhibition of FA oxidation with etomoxir (10 microM) had no effect on the improvement in GSIS. The beta-cell demonstrates metabolic flexibility as an adaptive response to ambient concentrations of FA.