Islet amyloid deposition is a pathogenic feature of type 2 diabetes, and these deposits contain the unique amyloidogenic peptide islet amyloid polypeptide. Autopsy studies in humans have demonstrated that islet amyloid is associated with loss of β-cell mass, but a direct role for amyloid in the pathogenesis of type 2 diabetes cannot be inferred from such studies. Animal studies in both spontaneous and transgenic models of islet amyloid formation have shown that amyloid forms in islets before fasting hyperglycemia and therefore does not arise merely as a result of the diabetic state. Furthermore, the extent of amyloid deposition is associated with both loss of β-cell mass and impairment in insulin secretion and glucose metabolism, suggesting a causative role for islet amyloid in the islet lesion of type 2 diabetes. These animal studies have also shown that β-cell dysfunction seems to be an important prerequisite for islet amyloid formation, with increased secretory demand from obesity and/or insulin resistance acting to further increase islet amyloid deposition. Recent in vitro studies suggest that the cytotoxic species responsible for islet amyloid-induced β-cell death are formed during the very early stages of islet amyloid formation, when islet amyloid polypeptide aggregation commences. Interventions to prevent islet amyloid formation are emerging, with peptide and small molecule inhibitors being developed. These agents could thus lead to a preservation of β-cell mass and amelioration of the islet lesion in type 2 diabetes.