Neonatal diabetes mellitus (NDM) is defined as hyperglycaemia occurring in the first few weeks of life. It can be either transient (TNDM) or permanent (PNDM), and until recently, little was known about the condition. A cohort of 30 infants with a history of TNDM has been studied, and findings have suggested that NDM does not have the same aetiology as classical type 1 childhood diabetes. Uniparental isodisomy of chromosome 6 and an unbalanced duplication of paternal chromosome 6 have both been described as a genetic basis for TNDM in over 75% of the cases. In addition, cerebellar hypoplasia and Walcott-Rallison syndrome have been associated with PNDM, suggesting an autosomal recessive inheritance pattern; furthermore, a mutation in the gene insulin promoter factor 1 has been identified as a cause of pancreatic agenesis in PNDM. In the long term, TNDM may reduce beta cell functional capacity and present a predisposition to type 2 diabetes mellitus.