Mitochondrial metabolism controls insulin secretion from the pancreatic beta-cell. Type 2 Diabetes evolves when the beta-cells fail to release appropriate amounts of insulin, causing metabolic dysregulation and hyperglycemia. It is attractive to assume that mitochondrial dysfunction plays a decisive role in these processes. Indeed, while being a rare condition, genetically determined dysfunction of mitochondria causes a Type 2 Diabetes-like syndrome. Here, we review what is known about mitochondrial dysfunction in the beta-cell in Type 2 Diabetes. The focus is on observations in humans but relevant studies in animal models of the disease are discussed. A particular emphasis is placed on changes in metabolic enzymes and function in beta-cell mitochondria and how altered structure of the organelle appears to facilitate its function. These molecular processes are subject to tight genetic as well as epigenetic control. Variations and implications of these mechanisms are reviewed. The emerging picture is that alterations in mitochondria may be a culprit in the pathogenetic processes culminating in Type 2 Diabetes. Such processes may prove to be targets for therapeutic interventions in the disease.