There is a rapidly increasing epidemic of type 2 diabetes in India and other Asian countries. The thrifty genotype and the thrifty phenotype are two nonexclusive explanations. People in the Indian subcontinent have faced undernutrition for many generations, and Indian babies are among the smallest in the world. However, the diabetes epidemic is of recent origin, and diabetes is more common among urban than rural Indians despite the higher birth weight of urban babies. This suggests that postnatal factors must also contribute. Thus, a life-course model of evolution of insulin resistance and type 2 diabetes, incorporating fetal, postnatal and adult components, seems most appropriate. For a given BMI, Indians have a higher percentage of body fat and more visceral fat than members of other populations. This thin-fat phenotype is present at birth. Neonatal size and body composition are influenced by parental size, maternal food intake, physical activity and circulating concentrations of nutrients and metabolites (folate, glucose, triglycerides, cholesterol etc.). Maternal insulin resistance promotes transfer of nutrients to the fetus. Accelerated childhood growth is another risk factor for adiposity and insulin resistance, especially in children born small. Childhood growth seems to be more influenced by paternal genetic factors, whereas intrauterine growth is more influenced by maternal factors (intrauterine environment). Urban lifestyles, including poor diet and sedentary habits, promote further obesity, insulin resistance and type 2 diabetes. These factors may be amenable to correction. Prevention of type 2 diabetes must begin in utero and continue throughout the life course.