Type 2 diabetes is now a pandemic and shows no signs of abatement. In this Seminar we review the pathophysiology of this disorder, with particular attention to epidemiology, genetics, epigenetics, and molecular cell biology. Evidence is emerging that a substantial part of diabetes susceptibility is acquired early in life, probably owing to fetal or neonatal programming via epigenetic phenomena. Maternal and early childhood health might, therefore, be crucial to the development of effective prevention strategies. Diabetes develops because of inadequate islet β-cell and adipose-tissue responses to chronic fuel excess, which results in so-called nutrient spillover, insulin resistance, and metabolic stress. The latter damages multiple organs. Insulin resistance, while forcing β cells to work harder, might also have an important defensive role against nutrient-related toxic effects in tissues such as the heart. Reversal of overnutrition, healing of the β cells, and lessening of adipose tissue defects should be treatment priorities.