Type 2 diabetes mellitus is a multifactorial metabolic disorder. It is characterized by chronic hyperglycemia, insulin resistance, and a relative insulin secretion defect. The prevalence of type 2 diabetes mellitus has risen worldwide in large part because of an increase in obesity and sedentary lifestyles. The underlying pathophysiology and complications of type 2 diabetes mellitus are still being elucidated. Recent advances in diabetes research have helped us to gain a better understanding about insulin resistance and insulin secretion defects. The evolving understanding about the influence of the incretin effect, insulin signal transduction, adipose tissue, intra-islet cell communication, and inflammation is changing the way in which we view type 2 diabetes mellitus. This new understanding will eventually provide us with new treatment approaches to help patients who have type 2 diabetes mellitus. This article gives a review of the current and emerging concepts of the pathophysiology of type 2 diabetes mellitus.