Type 2 diabetes (T2D) prevalence in the United States is significantly higher in African Americans vs Whites. Yet, the physiological mechanisms contributing to this health disparity have been poorly described. To design effective strategies to reduce this disparity, there is a need to determine whether racial differences in diabetes prevalence are attributable to modifiable or non-modifiable factors. This review synthesizes and critically evaluates the potential physiological and genetic mechanisms that may contribute to the higher susceptibility of African Americans to T2D. These mechanisms include: 1) obesity and fat distribution; 2) metabolic flexibility; 3) muscle physiology; 4) energy expenditure and fitness; and 5) genetics. We focus on the clinical significance of findings and limitations of the recent literature.