Type 2 diabetes (T2D) is thought to arise from the complex interplay of both genetic and environmental factors. Since the advent of genome-wide association studies (GWAS), we have seen considerable progress in our understanding of the role that genetics and gene-environment interactions play in the development of T2D. Recent work suggests that the adverse effect of several T2D loci may be abolished or at least attenuated by higher physical activity levels or healthy lifestyle, whereas low physical activity and dietary factors characterizing a Western dietary pattern may augment it. However, there still remain inconsistencies warranting further investigation. Lack of statistical power and measurement errors for the environmental factors continue to challenge our efforts for characterizing interactions. Although our recent focus on established T2D loci is reasonable, we may be overlooking many other potential loci not captured by recent T2D GWAS. Agnostic approaches to the discovery of gene and environment interactions may address this possibility, but their application to the field is currently limited and still faces conceptual challenges. Nonetheless, continued investment in gene-environment interaction studies through large collaborative efforts holds promise in furthering our understanding of the interplay between genetic and environmental factors.