Over the last decades, lipotoxicity and glucotoxicity emerged as established mechanisms participating in the pathophysiology of obesity-related type 2 diabetes in general, and in the loss of β-cell function in particular. However, these terms hold various potential biological processes, and it is not clear what precisely they refer to and to what extent they might be clinically relevant. In this review, we discuss the basis and the last advances of research regarding the role of free fatty acids, their metabolic intracellular pathways, and receptor-mediated signaling related to glucose-stimulated insulin secretion, as well as lipid-induced β-cell dysfunction. We also describe the role of chronically elevated glucose, namely, glucotoxicity, which promotes failure and dedifferentiation of the β cell. Glucolipotoxicity combines deleterious effects of exposures to both high glucose and free fatty acids, supposedly provoking synergistic defects on the β cell. Nevertheless, recent studies have highlighted the glycerolipid/free fatty acid cycle as a protective pathway mediating active storage and recruitment of lipids. Finally, we discuss the putative correspondence of the loss of functional β cells in type 2 diabetes with a natural, although accelerated, aging process.