Type 2 diabetes, a growing global health problem, has a complex etiology involving many interactions between genetic and environmental factors. Essential to the development of the disease is insulin resistance of the peripheral tissues. Insulin resistance may be partly modified by the specific types of dietary fatty acids. Trans fatty acids (TFAs), created through the transformation of polyunsaturated fatty acids from their natural cis form to the trans form, are abundant in the Western diet. TFAs take on similar properties as saturated fats, and appear to be more atherogenic. High intakes of saturated fats may promote insulin resistance. It is therefore reasonable to hypothesize that high intakes of TFAs would have similar, or stronger, effects. In this review, all current evidence on the topic of TFAs, insulin resistance, and type 2 diabetes is summarized and interpreted. Although there is some support from observational and experimental studies for the hypothesis that high intakes of TFAs may increase the risk for type 2 diabetes, inconsistencies across studies and methodological problems make it premature to draw definitive conclusions at this time. More experimental research in humans is needed to further address this question.