Diabetes is the most frequent endocrine disease in the pediatric population. The prevalence of both, type 1 and type 2 diabetes is increasing worldwide every year. The prevalence under age 15 years is predicted to rise in Europe by 70% between 2005 and 2020. Diabetes type 2, most often associated with obesity, is increasing rapidly as well and represents today between 8 and 43% of new-onset diabetes cases in children depending on geographic location. While in type 1 diabetes insulin-producing beta cells are destroyed, insulin resistance, followed by beta cell failure, characterizes diabetes type 2. Type 2 diabetes is associated with several environmental factors, the most important being obesity. Both, type 1 and type 2 diabetes are of polygenic origin. Over 40 distinct genomic locations have been associated with diabetes type 1. Recently, monogenic forms of diabetes, caused by a single gene defect in the beta cell machinery, are more often diagnosed due to new molecular insights into beta cell function and the possibility of genetic analyses, indispensable for diagnosis. Of all diabetic patients, 2% to 5% are thought to have a monogenic origin, affecting approximately 9,000 to 15,000 persons in Switzerland alone and four to ten millions worldwide. The fraction of underdiagnosed cases of monogenic diabetes is even higher in children and could represent up to 10% children with diabetes. Today the majority of these cases are missed, and there is an urgent need for better diagnostic tools. Understanding the complexity of transcriptional regulation in pancreas development constitutes the basis for the comprehension of beta cell physiology and several monogenic forms of diabetes. Mouse models provide insight into the underlying mechanisms of the development of diabetes. These transcription factors may also be promising candidates in future therapeutic approaches with the ultimate goal to cure diabetes. The identification of the genes involved is of outmost importance for the patient, since it will determine the choice of treatment and will allow for a more precise estimate of the risk for long-term complications. As several forms of monogenic diabetes can be treated with oral drugs, and multiple daily insulin injections are no longer needed, the accurate diagnosis may significantly improve metabolic control and the patient's quality of life.