Diabetes mellitus in paediatric patients used to be almost exclusively type 1, but in recent years, case series as well as hospital-based and population-based studies indicated that the number of children and adolescents with type 2 diabetes (T2DM) has been increasing. This development is alarming since T2DM in youth is usually not an isolated condition, but accompanied by other cardiovascular risk factors such as obesity, dyslipidaemia, hypertension and low-grade inflammation. In adults, numerous studies provided detailed data on prevalence, incidence and risk factors for the development of T2DM, but for children and adolescents clinical and experimental data are still rather limited. This review provides an overview about the epidemiology and pathogenesis of T2DM in youth and about impaired glucose regulation as major risk factor for diabetes development with a special focus on the recent literature on clinical and lifestyle-related risk factors. Differences in incidence and prevalence across different populations indicate that ethnic background and genetic pre-disposition may be important risk determinants. In addition, epigenetic factors and foetal programming appear to confer additional risk before birth. Among the environmental and lifestyle-related risk factors there is evidence that obesity, hypercaloric diet, physical inactivity, socio-economic position (SEP), smoking, low-grade inflammation, psychosocial stress and sleeping patterns contribute to the risk for T2DM. However, the assessment of the relevance of risk factors and of incidence or prevalence estimates in youth is complicated by methodological issues that are also discussed.