Neonatal diabetes is a rare condition characterized by hyperglycemia, requiring insulin treatment, diagnosed within the first months of life. The disorder may be either transient, resolving in infancy or early childhood with possible relapse later, or permanent in which case lifelong treatment is necessary. Both conditions are genetically heterogeneous; however, the majority of the cases of transient neonatal diabetes are due to abnormalities of an imprinted region of chromosome 6q24. For permanent neonatal diabetes, the most common causes are heterozygous activating mutations of KCNJ11, the gene encoding the Kir6.2 sub-unit of the ATP-sensitive potassium channel. In this article we discuss the clinical features of neonatal diabetes, the underlying genetic defects and the therapeutic implications.