The pancreatic beta-cell adapts to increased nutrient availability and insulin resistance by increasing its function and mass. These processes are orchestrated by signals derived from nutrient metabolism, hormones and cytokines. Their end-result is the regulation of insulin secretion and biosynthesis, and beta-cell proliferation and apoptosis. This review focuses on the mechanisms involved in beta-cell nutrient sensing and adaptation and the potential causes of beta-cell dysfunction and death in type 2 diabetes mellitus. Understanding the mechanisms that regulate adequate beta-cell adaptation and the natural history of beta-cell failure is of utmost importance for the development of novel disease modifying treatments.