In addition to genetic predisposition, environmental and lifestyle factors contribute to the pathogenesis of type 2 diabetes (T2D). Epigenetic changes may provide the link for translating environmental exposures into pathological mechanisms. In this study, we performed the first comprehensive DNA methylation profiling in pancreatic islets from T2D and non-diabetic donors. We uncovered 276 CpG loci affiliated to promoters of 254 genes displaying significant differential DNA methylation in diabetic islets. These methylation changes were not present in blood cells from T2D individuals nor were they experimentally induced in non-diabetic islets by exposure to high glucose. For a subgroup of the differentially methylated genes, concordant transcriptional changes were present. Functional annotation of the aberrantly methylated genes and RNAi experiments highlighted pathways implicated in β-cell survival and function; some are implicated in cellular dysfunction while others facilitate adaptation to stressors. Together, our findings offer new insights into the intricate mechanisms of T2D pathogenesis, underscore the important involvement of epigenetic dysregulation in diabetic islets and may advance our understanding of T2D aetiology.