Type 2 diabetes has become a major public health challenge worldwide. It is now widely accepted that genetic components affect the development of type 2 diabetes, in concert with environmental factors such as lifestyle and diet. Traditional linkage mapping, positional cloning, and candidate gene-based association studies have identified a few genetic variants in genes such as TCF7L2, PPARG, and KCNJ11 that are reproducibly related to the risk of type 2 diabetes. To date, about ten genome-wide association (GWA) studies have been published. These studies discovered new susceptibility genes for type 2 diabetes and provide novel insight into the diabetes etiology. In addition, data especially from lifestyle intervention trials display promising evidence that the genetic variants may interact with changes of dietary habit and physical activity in predisposing to type 2 diabetes. The gene-lifestyle interactions merit extensive exploration in large, prospective studies. The findings from these areas will substantially improve the prediction and prevention of type 2 diabetes.