Abundant evidence supports a genetic predisposition to both type 2 diabetes and the traits that precede diabetes (insulin resistance and insulin secretion). Unusual causes of diabetes have been identified, including autosomal dominant, single gene forms due to mutations of glucokinase, the hepatocyte nuclear factors, and insulin promoter factor 1. Mitochondrial mutations also may cause type 2 diabetes, but together these causes explain only a small fraction of type 2 diabetes. In contrast, up to 10% of type 2 diabetes, at least in Caucasian populations, may be autoimmune. Animal models of type 2 diabetes support multiple genetic loci. To identify the loci in the remaining 85% of cases, investigators have tested candidate genes in known pathways formutations with some success. However, no candidate identified to date appears to act as a major susceptibility locus. More recently investigators have used linkage approaches to find genes for type 2 diabetes and the prediabetic traits of insulin resistance and insulin secretion. A locus has now been mapped and potential causative variants identified on chromosome 2q, and many other studies are in progress. New genetic tools and the anticipated completion of the human genome project will likely result in the discovery of yet new genes and pathways that may offer new targets for intervention. Whether a better understanding of the pathophysiology can lead to earlier prediction and detection or prevention will depend on the magnitude of risk conferred by individual genes and particular populations.