There are two major forms of diabetes: type 1 and type 2. However, monogenic diabetes, associated with severe beta-cell dysfunction or with severe resistance to insulin action, is diagnosed with increasing frequency by genetic testing. The list of such forms of diabetes includes MODY, mitochondrial diabetes, permanent neonatal diabetes (PNDM) and transient neonatal diabetes, familial lipodystrophies and some others. These rare forms constitute probably at least a few per cent of all diabetes cases seen in diabetic clinics. The identification of the molecular background of specific forms of diabetes gives new insight into the underlying aetiology. This knowledge helps to optimize treatment in specific clinical situations. The proper differential diagnosis also helps to predict the progress of diabetes in affected individuals and defines the prognosis in the family. For example, in patients with MODY2 because of glucokinase mutations who have very mild diabetes characterized by modest fasting, hyperglycaemia diet is frequently sufficient. Some other forms of monogenic diabetes associated with impaired function of the beta-cell, such as MODY3 and PNDM linked to mutations in Kir6.2 and SUR1 genes, can be successfully managed by sulphonylurea agents. Although the examples of pharmacogenetics seem to be less spectacular in rare syndromes of insulin resistance, those patients can also benefit from genetic testing. In this paper, the aetiology of some monogenic diabetes forms is reviewed together with the clinical aspects of management of the affected individuals.