Obesity and insulin resistance are associated with the development of type 2 diabetes. It is well accepted that beta cell dysfunction is required for hyperglycaemia to occur. The prevailing view is that, in the presence of insulin resistance, beta cell dysfunction that occurs early in the course of the disease process is the critical abnormality. An alternative model has been proposed in which primary beta cell overstimulation results in insulin hypersecretion that then leads to the development of obesity and insulin resistance, and ultimately to beta cell exhaustion. In this review, data from preclinical and clinical studies, including intervention studies, are discussed in the context of these models. The preponderance of the data supports the view that an early beta cell functional defect is the more likely mechanism underlying the pathogenesis of hyperglycaemia in the majority of individuals who develop type 2 diabetes.