Globally, diabetes (and, in particular, type 2 diabetes) represents a major challenge to world health. Currently in the United States, the costs of treating diabetes and its associated complications exceed $100 billion annually, and this figure is expected to soar in the near future. Despite decades of intense research efforts, the genetic basis of the events involved in the pathogenesis of diabetes is still poorly understood. Diabetes is a complex multigenic syndrome primarily due to beta-cell dysfunction associated with a variable degree of insulin resistance. Recent advances have led to exciting new developments with regard to our understanding of the mechanisms that regulate insulin transcription. These include data that implicate chromatin as a critical regulator of this event. The ‘Histone Code’ is a widely accepted hypothesis, whereby sequential modifications to the histones in chromatin lead to regulated transcription of genes. One of the modifications used in the histone code is acetylation. This is probably the best characterized modification of histones, which is carried out under the control of histone acetyltransferases (HATs) and histone deacetylases (HDACs). These enzymes also regulate the activity of a number of transcription factors through acetylation. Increasing evidence links possible dysregulation of these mechanisms in the pathogenesis of diabetes, with important therapeutic implications. Copyright © 2005 John Wiley & Sons, Ltd.