Mounting epidemiological evidence indicates that environmental exposures in early life have roles in diabetes susceptibility in later life. Additionally, environmentally induced diabetic susceptibility could be transmitted to subsequent generations. Epigenetic modifications provide a potential association with the environmental factors and altered gene expression that might cause disease phenotypes. Here, we bring the increasing evidence that environmental exposures early in development are linked to diabetes through epigenetic modifications. This review first summarizes the epigenetic targets, including metastable epialleles and imprinting genes, by which the environmental factors can modify the epigenome. Then we review the epigenetics changes in response to environmental challenge during critical developmental windows, gametogenesis, embryogenesis, and fetal and postnatal period, with the specific example of diabetic susceptibility. Although the mechanisms are still largely unknown, especially in humans, the new research methods are now gradually available, and the animal models can provide more in-depth study of mechanisms. These have implications for investigating the link of the phenomena to human diabetes, providing a new perspective on environmentally triggered diabetes risk.