The development of the endocrine pancreas is controlled by a hierarchical network of transcriptional regulators. It is increasingly evident that this requires a tightly interconnected epigenetic “programme” to drive endocrine cell differentiation and maintain islet function. Epigenetic regulators such as DNA and histone-modifying enzymes are now known to contribute to determination of pancreatic cell lineage, maintenance of cellular differentiation states, and normal functioning of adult pancreatic endocrine cells. Persistent effects of an early suboptimal environment, known to increase risk of type 2 diabetes in later life, can alter the epigenetic control of transcriptional master regulators, such as Hnf4a and Pdx1. Recent genome-wide analyses also suggest that an altered epigenetic landscape is associated with the β cell failure observed in type 2 diabetes and aging. At the cellular level, epigenetic mechanisms may provide a mechanistic link between energy metabolism and stable patterns of gene expression. Key energy metabolites influence the activity of epigenetic regulators, which in turn alter transcription to maintain cellular homeostasis. The challenge is now to understand the detailed molecular mechanisms that underlie these diverse roles of epigenetics, and the extent to which they contribute to the pathogenesis of type 2 diabetes. In-depth understanding of the developmental and environmental epigenetic programming of the endocrine pancreas has the potential to lead to novel therapeutic approaches in diabetes.