The emerging public health problem of type 2 diabetes in youth reflects increasing rates of childhood obesity. As in adults, type 2 diabetes in children is part of the insulin resistance syndrome that includes hypertension, dyslipidemia and other atherosclerosis risk factors, and hyperandrogenism seen as premature adrenarche and polycystic ovary syndrome. Studies in children document risk factors for type 2 diabetes and associated cardiovascular risk factors, including obesity, family history, diabetic gestation, and underweight or overweight for gestational age. Genetically determined insulin resistance, or limited beta-cell reserve, has been demonstrated in high risk individuals. This genetic background, considered advantageous in a feast and famine existence (the thrifty genotype), is rendered detrimental with abundant food and physical inactivity, a lifestyle demonstrated to be typical of families of children with type 2 diabetes. Case finding in high risk individuals who are asymptomatic may be an appropriate response to the public health challenge of type 2 diabetes in children, because risk factors for cardiovascular disease are already present at the time of diagnosis. Treatment is dictated by the degree of metabolic derangement and symptoms. The only data on the use of oral hypoglycemic agents in children has been with metformin. Prevention efforts will require community and government involvement to reduce obesity and increase physical activity in the child, as well as adult, population.