Ketosis-prone diabetes (KPD) is a widespread, emerging, heterogeneous syndrome characterized by patients who present with diabetic ketoacidosis or unprovoked ketosis but do not necessarily have the typical phenotype of autoimmune type 1 diabetes. Multiple, severe forms of beta-cell dysfunction appear to underlie the pathophysiology of KPD. Until recently, the syndrome has lacked an accurate, clinically relevant and etiologically useful classification scheme. We have utilized a large, longitudinally followed, heterogeneous, multiethnic cohort of KPD patients to identify four clinically and pathophysiologically distinct subgroups that are separable by the presence or absence of beta-cell autoimmunity and the presence or absence of beta-cell functional reserve. The resulting "Abeta" classification system of KPD has proven to be highly accurate and predictive of such clinically important outcomes as glycemic control and insulin dependence, as well as an aid to biochemical and molecular investigations into novel causes of beta-cell dysfunction. In this review, we describe the current state of knowledge in regard to the natural history, pathophysiology, and treatment of the subgroups of KPD, with an emphasis on recent advances in understanding their immunological and genetic bases.