Somatostatin, produced by pancreatic islet δ cells, is a key intra-islet paracrine factor that regulates the secretion of the glucoregulatory hormones insulin and glucagon from β cells and α cells, respectively. Here, we show that glutamate and glucagon released by α cells cooperatively activate neighbouring δ cells through AMPA and glucagon receptors, thereby enabling spatiotemporal feedback control of glucagon secretion. Crucially, prior hypoglycaemia enhances this mechanism by sensitizing δ cells to α cell-derived factors and inducing long-lasting structural and functional changes that facilitate δ cell and α cell paracrine interaction. This culminates in somatostatin hypersecretion that impairs counter-regulatory glucagon release. These hypoglycaemia-driven effects were emulated by chemogenetic activation of α cells or high concentrations of exogenous glucagon but prevented by inhibitors of glucagon receptors or the transcription factor CREB. This plasticity represents a key component of the islet's 'metabolic memory', which, through impaired counter-regulatory glucagon secretion, increases the occurrence of recurrent hypoglycaemia that complicates the management of insulin-dependent diabetes.