Genes play an important role in the development of diabetes mellitus. Putative susceptibility genes could be the key to the development of diabetes. Type 1 diabetes mellitus is one of the most common chronic diseases of childhood. A combination of genetic and environmental factors is most likely the cause of Type 1 diabetes. The pathogenetic sequence leading to the selective autoimmune destruction of islet beta-cells and development of Type 1 diabetes involves genetic factors, environmental factors, immune regulation and chemical mediators. Unlike Type 1 diabetes mellitus, Type 2 diabetes is often considered a polygenic disorder with multiple genes located on different chromosomes being associated with this condition. This is further complicated by numerous environmental factors which also contribute to the clinical manifestation of the disorder in genetically predisposed persons. Only a minority of cases of type 2 diabetes are caused by single gene defects such as maturity onset diabetes of the young (MODY), syndrome of insulin resistance (insulin receptor defect) and maternally inherited diabetes and deafness (mitochondrial gene defect). Although Type 2 diabetes mellitus appears in almost epidemic proportions our knowledge of the mechanism of this disease is limited. More information about insulin secretion and action and the genetic variability of the various factors involved will contribute to better understanding and classification of this group of diseases. This article discusses the results of various genetic studies on diabetes with special reference to Indian population.