Background: The recent genome-wide association studies (GWAS) of Type 2 Diabetes (T2D) have identified the pancreatic β-cell as the culprit in the pathogenesis of the disease. Mitochondrial metabolism plays a crucial role in the processes controlling release of insulin and β-cell mass. This notion implies that mechanisms controlling mitochondrial function have the potential to play a decisive pathogenetic role in T2D. Scope of the review: This article reviews studies demonstrating that there is indeed mitochondrial dysfunction in islets in T2D, and that GWAS have identified a variant in the gene encoding transcription factor B1 mitochondrial (TFB1M), predisposing to T2D due to mitochondrial dysfunction and impaired insulin secretion. Mechanistic studies of the nature of this pathogenetic link, as well as of other mitochondrial transcription factors, are described. Major conclusions: Based on this, it is argued that transcription and translation in mitochondria are critical processes determining mitochondrial function in β-cells in health and disease.