Genetic studies in large outbred populations have documented a complex, highly polygenic basis for type 2 diabetes (T2D). Most of the variants currently known to be associated with T2D risk have been identified in large studies that included tens of thousands of individuals who are representative of a single major ethnic group such as European, Asian, or African. However, most of these variants have only modest effects on the risk for T2D; identification of definitive ‘causal variant’ or ‘causative loci’ is typically lacking. Studies in isolated populations offer several advantages over outbred populations despite being, on average, much smaller in sample size. For example, reduced genetic variability, enrichment of rare variants, and a more uniform environment and lifestyle, which are hallmarks of isolated populations, can reduce the complexity of identifying disease-associated genes. To date, studies in isolated populations have provided valuable insight into the genetic basis of T2D by providing both a deeper understanding of previously identified T2Dassociated variants (e.g. demonstrating that variants in KCNQ1 have a strong parent-of-origin effect) or providing novel variants (e.g. ABCC8 in Pima Indians, TBC1D4 in the Greenlandic population, HNF1A in Canadian Oji-Cree). This review summarizes advancements in genetic studies of T2D in outbred and isolated populations, and provides information on whether the difference in the prevalence of T2D in different populations (Pima Indians vs. non-Hispanic Whites and non-Hispanic Whites vs. non-Hispanic Blacks) can be explained by the difference in risk allele frequencies of established T2D variants.