Pancreatic islets are complex micro-organs consisting of at least three different cell types: glucagon-secreting alpha, insulin-producing beta and somatostatin-releasing delta cells. Somatostatin is a powerful paracrine inhibitor of insulin and glucagon secretion. In diabetes, increased somatostatinergic signalling leads to defective counter-regulatory glucagon secretion. This increases the risk of severe hypoglycaemia, a dangerous complication of insulin therapy. The regulation of somatostatin secretion involves both intrinsic and paracrine mechanisms but their relative contributions and whether they interact remain unclear. Here we show that dapagliflozin-sensitive glucose- and insulin-dependent sodium uptake stimulates somatostatin secretion by elevating the cytoplasmic Na⁺ concentration (intracellular [Na⁺]; [Na⁺]_i) and promoting intracellular Ca²⁺-induced Ca²⁺ release. This mechanism also becomes activated when [Na⁺]_i is elevated following the inhibition of the plasmalemmal Na⁺-K⁺ pump by reductions of the extracellular K⁺ concentration emulating those produced by exogenous insulin in vivo. Islets from some donors with type-2 diabetes hypersecrete somatostatin, leading to suppression of glucagon secretion that can be alleviated by a somatostatin receptor antagonist. Our data highlight the role of Na⁺ as an intracellular second messenger, illustrate the significance of the intra-islet paracrine network and provide a mechanistic framework for pharmacological correction of the hormone secretion defects associated with diabetes that selectively target the delta cells.