Diabetes mellitus is a rare disorder during the first 2 years of life, amounting to about 3-5% of all cases diagnosed before the fifteenth birthday. However, in spite of low numerical values, this is an important diagnosis, since we are dealing with a vulnerable age group with major and special problems related to diagnosis, treatment and psychosocial follow-up. Efforts should be made to establish a molecular genetic diagnosis as early as possible (e.g. homozygous glucokinase deficiency, defects of the ATP-sensitive potassium channel, chromosome 6 imprinting abnormalities). This is particularly important, since patients with Kir6.2 and SUR1 defects can now be treated with oral sulfonylureas. Major advancements have been obtained and continue to be made with respect to diagnosis and classification. Differentiation between transient and permanent neonatal diabetes can only be done after long-term follow-up. Patients should be scrutinized for comorbidity (e.g. celiac disease, Wolcott-Rallison syndrome). Type 1 diabetes is probably the most prevalent subtype, particularly after the first year of life. Insulin treatment in infancy continues to represent major technical, medical and psychological challenges. Family support is mandatory and close attention should be paid to psychosocial issues.