The inhibitory neurotransmitter GABA is synthesized by the enzyme glutamic acid decarboxylase (GAD) in neurons and in pancreatic β-cells in islets of Langerhans where it functions as a paracrine and autocrine signaling molecule regulating the function of islet endocrine cells. The localization of the two non-allelic isoforms GAD65 and GAD67 to vesicular membranes is important for rapid delivery and accumulation of GABA for regulated secretion. While the membrane anchoring and trafficking of GAD65 are mediated by intrinsic hydrophobic modifications, GAD67 remains hydrophilic, and yet is targeted to vesicular membrane pathways and synaptic clusters in neurons by both a GAD65-dependent and a distinct GAD65-independent mechanism. Herein we have investigated the membrane association and targeting of GAD67 and GAD65 in monolayer cultures of primary rat, human, and mouse islets and in insulinoma cells. GAD65 is primarily detected in Golgi membranes and in peripheral vesicles distinct from insulin vesicles in β-cells. In the absence of GAD65, GAD67 is in contrast primarily cytosolic in β-cells; its co-expression with GAD65 is necessary for targeting to Golgi membranes and vesicular compartments. Thus, the GAD65-independent mechanism for targeting of GAD67 to synaptic vesicles in neurons is not functional in islet β-cells. Therefore, only GAD65:GAD65 homodimers and GAD67:GAD65 heterodimers, but not the GAD67:GAD67 homodimer gain access to vesicular compartments in β-cells to facilitate rapid accumulation of newly synthesized GABA for regulated secretion and fine tuning of GABA-signaling in islets of Langerhans.