Cushing's syndrome, caused by increased production of cortisol, leads to metabolic dysfunction including visceral adiposity, hypertension, hyperlipidaemia and type 2 diabetes. The similarities with the metabolic syndrome are striking and major efforts have been made to find obesity-associated changes in the regulation of glucocorticoid action and synthesis, both at a systemic level and tissue level. Obesity is associated with tissue-specific alterations in glucocorticoid metabolism, with increased activity of the glucocorticoid-regenerating enzyme 11β-hydroxysteroid dehydrogenase type 1 (11βHSD1) in subcutaneous adipose tissue and decreased conversion of cortisone to cortisol, interpreted as decreased 11βHSD1 activity, in the liver. In addition, genetic manipulation of 11βHSD1 activity in rodents can either induce (by overexpression of Hsd11b1, the gene encoding 11βHSD1) or prevent (by knocking out Hsd11b1) obesity and metabolic dysfunction. Taken together with earlier evidence that non-selective inhibitors of 11βHSD1 enhance insulin sensitivity, these results led to the hypothesis that inhibition of 11βHSD1 might be a promising target for treatment of the metabolic syndrome. Several selective 11βHSD1 inhibitors have now been developed and shown to improve metabolic dysfunction in patients with type 2 diabetes, but the small magnitude of the glucose-lowering effect has precluded their further commercial development.This review focuses on the role of 11βHSD1 as a tissue-specific regulator of cortisol exposure in obesity and type 2 diabetes in humans. We consider the potential of inhibition of 11βHSD1 as a therapeutic strategy that might address multiple complications in patients with type 2 diabetes, and provide our thoughts on future directions in this field.