Genetic and environmental factors as well as their interactions contribute to the pathogenesis of type 2 diabetes. Linkage analysis, candidate gene approaches, genome-wide association studies, and sequencing have been used in the identification of common, low-frequency and rare variants for type 2 diabetes. Genome-wide association studies have identified >80 common variants for type 2 diabetes, with small effect sizes (risk of type 2 diabetes increased by 5-40%). Almost all of these variants regulate insulin secretion, and only a few regulate insulin sensitivity. Common variants capture only ∼10% of the heritability of type 2 diabetes. Low-frequency and rare variants with large effects have also been identified, but their contribution to 'missing heritability' at the population level is limited. Gene-environment and gene-gene interactions and epigenetics are likely to contribute to the missing heritability of type 2 diabetes. Epigenetic factors (DNA methylations and histone modifications) are especially important because they might mediate the effects of environmental exposures on the risk of type 2 diabetes. Although understanding of the genetics of type 2 diabetes has exhibited great progress in the past few years, a substantial amount of additional work will be required to identify causal variants/genes and molecular mechanisms via which the association signals found confer diabetes risk.