Ever since the discovery of small non-coding RNAs, microRNAs have been identified to play a critical role in development and function of pancreatic insulin-producing beta cells. Research carried out until now demonstrates that microRNAs can specifically target key pancreatic transcription factors and signalling molecules. This in turn may influence changes in insulin production and secretion. microRNAs are also identified in insulin target organs that are altered as a result of hyperglycemia and insulin resistance. Recent studies demonstrate that microRNAs are not only confined to cells but are also detected in biological fluids including serum, plasma and urine. These data indicate that miRNAs may be looked upon having a dual role, as biomarkers and as regulators of disease. We review the existing literature in understanding the role of microRNAs in development, function and death of pancreatic beta cells as well as in the development of metabolic disease. We discuss the possible mechanisms that contribute to identifying the role of microRNAs as sensitive and efficient biomarkers to predict the progression of diabetes. Understanding tissue-specific microRNA signatures and their role as a cause or effect of diabetes would provide more information on progression of this disease.