Obesity and diabetes are rapidly developing into epidemics in both the developed and developing countries and are major health problems that place a huge economic burden on society. The parallel increases in prevalence of these pathophysiological conditions suggest there are potential mechanisms that link the pathophysiology of obesity with diabetes. Obesity is characterized by an excess adipose tissue mass and is usually associated with elevated levels of circulating leptin – an adipose-derived hormone – that fails to suppress appetite due to leptin resistance. It is also known that obese individuals and rodent models are only insulin resistant in their early stages and do not develop diabetes because the pancreatic beta cells are capable of compensating for the insulin resistance by increasing their mass and appropriately increasing insulin secretion. A failure of the pancreatic beta cells to compensate leads to the development of overt diabetes. While the precise mechanisms that trigger the failure of the pancreatic beta cells in the obese state are not fully understood, it has been suggested to be linked to the effects of adipokines secreted by the adipocyte. Several adipokines are secreted by adipocytes including leptin, adiponectin, free fatty acids, interleukin-6, tumor necrosis factor-alpha, C-reactive protein and potentially others. Of relevance to this presentation are the effects of leptin on the endocrine pancreas. Indeed, in addition to its effects on the hypothalamus numerous studies indicate that leptin acts on multiple peripheral tissues including the endocrine pancreas. Exogenous leptin is able to modulate insulin secretion ex vivo in isolated islets from rodents and humans. Mice with a knockout of the leptin receptor in the pancreas manifest alterations in both beta cell mass and glucose-stimulated insulin secretion. Other studies suggest that lack of letpin signaling in the pancreas enhances the ability of the incretin hormone and sulphonylureas to promote insulin secretion. Intriguingly, the effects of leptin on insulin secretion are altered in vivo when mice are fed a high fat diet. Similarly, leptin effects on beta cells are altered when islets are chronically treated with free fatty acids. These studies suggest cross talk in the molecular pathways that link the actions of leptin with those of glucose, GLP-1, free fatty acids and sulphonylureas in the overall regulation of islet cell function and proliferation. These data will be reviewed in the presentation. There will be a discussion regarding the role of leptin in modulating islet biology independent of its effects on the hypothalamus with consequences for the development of diabetes in the obese state.