Type 2 diabetes (T2D) and obesity are complex disorders that constitute major public health problems. The evidence for familial aggregation of both T2D and obesity is substantial. To date, more than 150 genetic loci are associated with the development of monogenic, syndromic, or multifactorial forms of T2D or obesity. However, the proportion of overall trait variance explained by these associated loci is modest (~5-10% for T2D, ~2% for body mass index (BMI)). Some of the familial aggregation not attributable to known genetic variation, as well as many of the effects of environmental exposures, may reflect epigenetic processes. In this review, we discuss the evidence concerning the genetic contribution to individual risk of T2D and obesity, and explore the potential role of epigenetic mechanisms. We also explain how genetics, epigenetics, and environment are likely to interact to define the individual risk of disease.