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Type 2 diabetes (T2D) is a disease of pandemic proportions, one defined by a complex aetiological mix of genetic, epigenetic, environmental, and lifestyle risk factors. Whilst the last decade of T2D genetic research has identified more than 100 loci showing strong statistical association with disease susceptibility, our inability to capitalise upon these signals reflects, in part, a lack of appropriate human cell models for study. This review discusses the impact of two complementary, state-of-the-art technologies on T2D genetic research: the generation of stem cell-derived, endocrine pancreas-lineage cells and the editing of their genomes. Such models facilitate investigation of diabetes-associated genomic perturbations in a physiologically representative cell context and allow the role of both developmental and adult islet dysfunction in T2D pathogenesis to be investigated. Accordingly, we interrogate the role that patient-derived induced pluripotent stem cell models are playing in understanding cellular dysfunction in monogenic diabetes, and how site-specific nucleases such as the clustered regularly interspaced short palindromic repeats (CRISPR)-Cas9 system are helping to confirm genes crucial to human endocrine pancreas development. We also highlight the novel biology gleaned in the absence of patient lines, including an ability to model the whole phenotypic spectrum of diabetes phenotypes occurring both in utero and in adult cells, interrogating the non-coding ‘islet regulome’ for disease-causing perturbations, and understanding the role of other islet cell types in aberrant glycaemia. This article aims to reinforce the importance of investigating T2D signals in cell models reflecting appropriate species, genomic context, developmental time point, and tissue type.