The heterogeneity in clinical presentation of type 2 diabetes points to a complex pathophysiology, with diverse routes leading to beta cell failure. Genetic variants, epigenetic factors and environmental stresses, such as Western diets rich in saturated fats, play essential roles. Our work has focused on the role of saturated free fatty acids in beta cell failure. We have used RNA sequencing to map the human islet transcriptome and uncover mechanisms of fatty acid-induced beta cell dysfunction and death. We identified endoplasmic reticulum stress as an important cellular response contributing to free fatty acid-induced beta cell dysfunction and apoptosis. In particular, signaling in the PERK branch of the endoplasmic reticulum stress response leads to lipotoxic beta cell demise. Monogenic forms of diabetes provide strong human genetic evidence for the importance of PERK signaling in maintaining beta cell integrity. Loss-of-function mutations in several genes in the PERK branch of the endoplasmic reticulum stress response have been described as a cause of monogenic young-onset diabetes. A better understanding of the mechanisms of beta cell failure will enable to identify therapeutic targets for beta cell protection in monogenic and polygenic diabetes.