Bariatric surgery (from the Greek words baros meaning 'weight' and iatrikos 'the art of healing') is a rapidly evolving branch of surgical science. The aim is to induce major weight loss in those whose obesity places them at high risk of serious health problems. In an attempt to balance the risks of surgery against the benefits of weight loss, bariatric operations are currently performed only in the morbidly obese, or those with a body mass index (BMI) > 35 kgm(-2) who already have developed comorbidity such as type 2 diabetes. Although weight loss is beneficial for obese patients with diabetes, current medical treatment for obesity is difficult. In contrast, observational studies show a major impact of bariatric surgery on diabetes, raising the question whether this approach should be used more widely to treat diabetes in obese patients? If bariatric surgery were shown to be the best way to treat diabetes in obese subjects the implications for health services would be wide-ranging. Bariatric surgery leads to withdrawal of diabetic treatment in about 60% or more of patients, and reductions of therapy for many others. Although data on bariatric surgery in subjects with diabetes are provocative, most studies have been uncontrolled or flawed in other ways. Most importantly, bariatric surgery has not yet been compared against standard medical treatment for diabetes in randomized controlled trials with diabetes-specific endpoints in all relevant patient groups. Potential indications for bariatric surgery are discussed, and the unanswered questions that need to be addressed by clinical trials are summarized. Although small numbers of patients may be interested in bariatric surgery for type 2 diabetes, current data are insufficient to endorse its wide scale use for this indication. Until essential studies are undertaken the role and economics of bariatric surgery in the diabetic clinic will remain uncertain.