BACKGROUND: Optimal pancreatic beta-cell function is essential for the regulation of glucose homeostasis in both humans and animals and its impairment leads to the development of diabetes. Type 2 diabetes is a polygenic disease aggravated by environmental factors such as low physical activity or a hypercaloric high-fat diet. RESULTS: Free fatty acids represent an important factor linking excess fat mass to type 2 diabetes. Several studies have shown that chronically elevated free fatty acids have a negative effect on beta-cell function leading to elevated insulin secretion basally but with an impaired response to glucose. The transcription factors PPARalpha, PPARgamma and SREBP-1c respond to changing fat concentrations in tissues, thereby coordinating the genomic response to altered metabolic conditions to promote either fat storage or catabolism. These transcription factors have been identified in beta-cells and it appears that each may exert influence on beta-cell function in health and disease. CONCLUSION: The role of the PPARs and SREBP-1c as potential mediators of lipotoxicity is an emerging area of interest.