Type 2 diabetes is caused by defects in both insulin sensitivity and insulin secretion. Glucose triggers insulin secretion by causing exocytosis of insulin granules from pancreatic β-cells. High circulating cholesterol levels and a diminished capacity of serum to remove cholesterol from β-cells are observed in diabetic individuals. Both of these effects can lead to cholesterol accumulation in β-cells and contribute to β-cell dysfunction. However, the molecular mechanisms by which cholesterol accumulation impairs β-cell function remain largely unknown. Here, we used total internal reflection fluorescence microscopy to address, at the single-granule level, the role of cholesterol in regulating fusion pore dynamics during insulin exocytosis. We focused particularly on the effects of cholesterol overload, which is relevant to type 2 diabetes. We show that excess cholesterol reduced the number of glucose-stimulated fusion events, and modulated the proportion of full fusion and kiss-and-run fusion events. Analysis of single exocytic events revealed distinct fusion kinetics, with more clustered and compound exocytosis observed in cholesterol-overloaded β-cells. We provide evidence for the involvement of the GTPase dynamin, which is regulated in part by cholesterol-induced phosphatidylinositol 4,5-bisphosphate enrichment in the plasma membrane, in the switch between full fusion and kiss-and-run fusion. Characterization of insulin exocytosis offers insights into the role that elevated cholesterol may play in the development of type 2 diabetes.