The prevalence of diabetes mellitus (DM) is increasing worldwide, a consequence of the alarming rise in obesity and metabolic syndrome (MetS). Oxidative stress and inflammation are key physiological and pathological events linking obesity, insulin resistance, and the progression of type 2 DM (T2DM). Unresolved inflammation alongside a "glucolipotoxic" environment of the pancreatic islets, in insulin resistant pathologies, enhances the infiltration of immune cells which through secretory activity cause dysfunction of insulin-secreting β-cells and ultimately cell death. Recent molecular investigations have revealed that mechanisms responsible for insulin resistance associated with T2DM are detected in conditions such as obesity and MetS, including impaired insulin receptor (IR) signalling in insulin responsive tissues, oxidative stress, and endoplasmic reticulum (ER) stress. The aim of the present review is to describe the evidence linking oxidative stress and inflammation with impairment of insulin secretion and action, which result in the progression of T2DM and other conditions associated with metabolic dysregulation.