Type 2 diabetes (T2D) is a growing health problem worldwide. While peripheral insulin resistance is common during obesity and aging in both animals and people, progression to T2D is largely due to insulin secretory dysfunction and significant apoptosis of functional β-cells, leading to an inability to compensate for insulin resistance. It is recognized that environmental factors and nutrition play an important role in the pathogenesis of diabetes. However, our knowledge surrounding molecular mechanisms by which these factors trigger β-cell dysfunction and diabetes is still limited. Recent discoveries raise the possibility that epigenetic changes in response to environmental stimuli may play an important role in the development of diabetes. In this paper, we review emerging knowledge regarding epigenetic mechanisms that may be involved in β-cell dysfunction and pathogenesis of diabetes, including the role of nutrition, oxidative stress and inflammation. We will mainly focus on the role of DNA methylation and histone modifications but will also briefly review data on miRNA effects on the pancreatic islets. Further studies aimed at better understanding how epigenetic regulation of gene expression controls β-cell function may reveal potential therapeutic targets for prevention and treatment of diabetes.