Type 2 diabetes (T2DM) is a common complex metabolic disorder that has a strong genetic component. Recent advances in genome-wide association studies have revolutionized our knowledge regarding the genetics of T2DM. There are at least 64 common genetic variants that are strongly associated with T2DM. However, the pathophysiologic roles of these variants are mostly unknown and require further functional characterization. The variants identified so far have a small effect size and their added effect explains less than 10 % of the T2DM heritability. The current ongoing whole exome and whole genome studies of T2DM are focused on identifying functionally important rare variants that have a stronger effect. Through these efforts, we will have a better understanding of the genetic architecture of T2DM and its pathophysiology. The potential clinical applications of genetic studies of T2DM include risk prediction, identification of novel therapeutic targets, genetic prediction of efficacy and toxicity of anti-diabetic medications, and eventually optimization of patient care through personalized genomic medicine. We hope further research in genetics of T2DM could aid patient care and improve outcomes of T2DM patients.