Type 2 diabetes is the result of a progressive impairment of pancreatic beta-cell function in the setting of worsening insulin resistance. Studies in high-risk populations have demonstrated that during progression to diabetes, beta cells have declining function and lose the first phase of insulin secretion, resulting in less than adequate suppression of hepatic glucose production following meals. In addition, oscillations of insulin secretion become unmatched from their normal coupling with glucose. Several mechanisms are thought to be responsible for impaired beta-cell function, including glucose toxicity and lipotoxicity, and potentially contribute to beta-cell loss. Advances in molecular science have elucidated several cytokines and transcription factors possibly implicated in the loss of beta-cell mass. In the past 15 years, clinical trials have given hope for potential therapies that may either delay or prevent the progression to diabetes. Lifestyle modification and pharmaceutical treatment remain the most promising interventions.