Based on our investigations in first-degree relatives, in twins in general, and in monozygotic twins discordant for type 2 diabetes, we have studied the inheritance of glucose intolerance, insulin resistance and insulin secretion in order to evaluate the role of genes versus environment in the development of type 2 diabetes. Insulin resistance in type 2 diabetes is mainly linked to glucose disposal in skeletal muscle, i.e. reduced glycogen synthesis. In order to investigate the genetic component responsible for the reduced glycogen synthase activity and reduced glucose transport, we also investigated cultured myotubes based on in vivo skeletal muscle biopsies. The results obtained in our own studies are discussed in comparison with the international literature. We conclude that both genetic and environmental factors play a role in the development of type 2 diabetes (hyperglycaemia), and that only subjects who are genetically disposed to insulin resistance and who possess beta-cells which are unable to compensate for the degree of insulin resistance seem to develop type 2 diabetes. Variables of two gene alleles disposing to insulin resistance have been identified, and their role is discussed. The most important environmental factor seems to be obesity, but intrauterine malnutrition also plays a role. The cellular mechanism responsible for obesity/lipid-induced diabetes mellitus is discussed with specific emphasis on the role of accumulation of long-chain AcylCoA and triglycerides in liver, muscle and beta-cells.