In nondiabetic subjects, insulin secretion is sufficiently increased as a compensatory adaptation to insulin resistance whereas in subjects with type 2 diabetes, the adaptation is insufficient. Evidences for the islet dysfunction in type 2 diabetes are a)impaired insulin response to various challenges such as glucose, arginine and isoproterenol, b)defective dynamic of insulin secretion resulting in preferential reduction on first phase insulin secretion and irregular oscillations of plasma insulin and c)defective conversion of proinsulin to insulin leading to elevated proinsulin to insulin ratio. In addition, recent studies have also presented evidence of a reduced beta cell mass in diabetes, caused predominantly by enhanced islet apoptosis, although this needs to be confirmed in more studies. These defects may be caused by primary beta cell defects, such as seen in the monogenic diabetes forms of MODY, or by secondary beta cell defects, caused by glucotoxicity, lipotoxicity or islet amyloid aggregation. The defects may also be secondary to defective beta cell stimulation by incretin hormones or the autonomic nerves. The appreciation of islet dysfunction as a key factor underlying the progression from an insulin resistant state into type 2 diabetes has therapeutic implications, since besides improvement of insulin sensitivity, treatment should also aim at improving the islet compensation. This may possibly be achieved by stimulating insulin secretion, supporting islet stimulating mechanisms, removing toxic beta-cell insults and inhibiting beta cell apoptosis.