Type 2 diabetes mellitus is a heterogeneous syndrome characterized by abnormalities in carbohydrate and fat metabolism. The causes of type 2 diabetes are multi-factorial and include both genetic and environmental elements that affect beta-cell function and tissue (muscle, liver, adipose tissue, pancreas) insulin sensitivity. Although there is considerable debate as to the relative contributions of beta-cell dysfunction and reduced insulin sensitivity to the pathogenesis of diabetes, it is generally agreed that both these factors play important roles. However, the mechanisms controlling the interplay of these two impairments are unclear. A number of factors have been suggested as possibly linking insulin resistance and beta-cell dysfunction in the pathogenesis of type 2 diabetes. A majority of individuals suffering from type 2 diabetes are obese, with central visceral adiposity. Therefore, the adipose tissue should play a crucial role in the pathogenesis of type 2 diabetes. Although the predominant paradigm used to explain this link is the portal/visceral hypothesis giving a key role in elevated non-esterified fatty acid concentrations, two new emerging paradigms are the ectopic fat storage syndrome (deposition of triglycerides in muscle, liver and pancreatic cells) and the adipose tissue as endocrine organ hypothesis (secretion of various adipocytokins, i.e. leptin, TNF-alpha, resistin, adiponectin, implicated in insulin resistance and possibly beta-cell dysfunction). These two paradigms constitute the framework for the study of the interplay between insulin resistance and beta-cell dysfunction in type 2 diabetes as well as between our obesogenic environment and diabetes risk in the next decade.