The emerging epidemic of type 2 diabetes (T2DM) in young people reflects increasing rates of obesity and parallels the increasing frequency of T2DM in adults. As in adults, T2DM in children is part of the insulin resistance syndrome that includes hyperandrogenism seen as premature adrenarche and polycystic ovary syndrome, hypertension, dyslipidemia, and other atherosclerosis risk factors. Recent studies in children document risk factors for T2DM, and associated cardiovascular risk factors, including obesity, family history, diabetic gestation, and underweight or overweight for gestational age. Genetically determined insulin resistance or limited beta-cell reserve has been demonstrated in high-risk individuals, including first-degree relatives of girls with premature adrenarche. This genetic background, considered advantageous in a feast-and-famine existence (the thrifty genotype), is rendered detrimental with abundant food and physical inactivity, a lifestyle demonstrated to be typical of families of children with T2DM. The increasing incidence of T2DM in children and adolescents threatens to become a major public health problem. Risk factors for cardiovascular disease, hypertension, hyperlipidemia, and microalbuminuria are present at diagnosis of T2DM in Native American adolescents, indicating that insulin resistance has been present for some time before the diagnosis of diabetes was made. Case finding is likely to be beneficial in high-risk youths. Treatment is the same as that of adults. The only data on use of oral hypoglycemic agents in children have been with metformin. Community and governmental efforts to educate all children and their parents about the need for physical activity and dietary modification are essential to control this epidemic.