The role of islet amyloidosis in the onset and progression of Type 2 diabetes remains obscure. Islet amyloid polypeptide is a 37 amino-acid, beta-cell peptide which is co-stored and co-released with insulin. Human islet amyloid polypeptide refolds to a beta-conformation and oligomerises to form insoluble fibrils; proline substitutions in rodent islet amyloid polypeptide prevent this molecular transition. Pro-islet amyloid polypeptide (67 amino acids in man) is processed in secretory granules. Refolding of islet amyloid polypeptide may be prevented by intragranular heterodimer formation with insulin (but not proinsulin). Diabetes-associated abnormal proinsulin processing could contribute to de-stabilisation of granular islet amyloid polypeptide. Increased pro-islet amyloid polypeptide secretion as a consequence of islet dysfunction could promote fibrillogenesis; the propeptide forms fibrils and binds to basement membrane glycosamino-glycans. Islet amyloid polypeptide gene polymorphisms are not universally associated with Type 2 diabetes. Transgenic mice expressing human islet amyloid polypeptide gene have increased islet amyloid polypeptide concentrations but develop islet amyloid only against a background of obesity and/or high fat diet. In transgenic mice, obese monkeys and cats, initially small perivascular deposits progressively increase to occupy 80% islet mass; the severity of amyloidosis in animal models is related to the onset of hyperglycaemia, suggesting that islet amyloid and the associated destruction of islet cells cause diabetes. In human diabetes, islet amyloid can affect less than 1% or up to 80% of islets indicating that islet amyloidosis largely results from diabetes-related pathologies and is not an aetiological factor for hyperglycaemia. However, the associated progressive beta-cell destruction leads to severe islet dysfunction and insulin requirement.