The AMP-activated protein kinase (AMPK) is a metabolic stress-sensing αβγ heterotrimer responsible for energy homeostasis. Pharmacological inhibition of AMPK is regarded as a therapeutic strategy in some disease settings including obesity and cancer; however, the broadly used direct AMPK inhibitor compound C suffers from poor selectivity. We have discovered a dihydroxyquinoline drug (MT47-100) with novel AMPK regulatory properties, being simultaneously a direct activator and inhibitor of AMPK complexes containing the β1 or β2 isoform, respectively. Allosteric inhibition by MT47-100 was dependent on the β2 carbohydrate-binding module (CBM) and determined by three non-conserved CBM residues (Ile81, Phe91, Ile92), but was independent of β2-Ser108 phosphorylation. Whereas MT47-100 regulation of total cellular AMPK activity was determined by β1/β2 expression ratio, MT47-100 augmented glucose-stimulated insulin secretion from isolated mouse pancreatic islets via a β2-dependent mechanism. Our findings highlight the therapeutic potential of isoform-specific AMPK allosteric inhibitors.