In this contribution we put forward a novel hypothesis concerning the aetiology of Type 2 (non-insulin-dependent) diabetes mellitus. The concept underlying our hypothesis is that poor fetal and early post-natal nutrition imposes mechanisms of nutritional thrift upon the growing individual. We propose that one of the major long-term consequences of inadequate early nutrition is impaired development of the endocrine pancreas and a greatly increased susceptibility to the development of Type 2 diabetes. In the first section we outline our research which has led to this hypothesis. We will then review the relevant literature. Finally we show that the hypothesis suggests a reinterpretation of some findings and an explanation of others which are at present not easy to understand.