Glucotoxicity, lipotoxicity, and glucolipotoxicity are secondary phenomena that are proposed to play a role in all forms of type 2 diabetes. The underlying concept is that once the primary pathogenesis of diabetes is established, probably involving both genetic and environmental forces, hyperglycemia and very commonly hyperlipidemia ensue and thereafter exert additional damaging or toxic effects on the beta-cell. In addition to their contribution to the deterioration of beta-cell function after the onset of the disease, elevations of plasma fatty acid levels that often accompany insulin resistance may, as glucose levels begin to rise outside of the normal range, also play a pathogenic role in the early stages of the disease. Because hyperglycemia is a prerequisite for lipotoxicity to occur, the term glucolipotoxicity, rather than lipotoxicity, is more appropriate to describe deleterious effects of lipids on beta-cell function. In vitro and in vivo evidence supporting the concept of glucotoxicity is presented first, as well as a description of the underlying mechanisms with an emphasis on the role of oxidative stress. Second, we discuss the functional manifestations of glucolipotoxicity on insulin secretion, insulin gene expression, and beta-cell death, and the role of glucose in the mechanisms of glucolipotoxicity. Finally, we attempt to define the role of these phenomena in the natural history of beta-cell compensation, decompensation, and failure during the course of type 2 diabetes.