Diabetes has reached epidemic proportions worldwide. Currently, approximately 537 million adults (20–79 years) have diabetes, and the total number of people with diabetes is continuously increasing. Diabetes includes several subtypes. About 80% of all cases of diabetes are type 2 diabetes (T2D). T2D is a polygenic disease with an inheritance ranging from 30 to 70%. Genetic and environment/lifestyle factors, especially obesity and sedentary lifestyle, increase the risk of T2D. In this review, we discuss how studies on the genetics of diabetes started, how they expanded when genome-wide association studies and exome and whole-genome sequencing became available, and the current challenges in genetic studies of diabetes. T2D is heterogeneous with respect to clinical presentation, disease course, and response to treatment, and has several subgroups which differ in pathophysiology and risk of micro- and macrovascular complications. Currently, genetic studies of T2D focus on these subgroups to find the best diagnoses and treatments for these patients according to the principles of precision medicine.