Type 2 diabetes (T2D) is a highly prevalent and chronic metabolic disorder. Recent evidence suggests that formation of toxic aggregates of the islet amyloid polypeptide (IAPP) might contribute to β-cell dysfunction and disease. However, the mechanism of protein aggregation and associated toxicity remains unclear. Misfolding, aggregation, and accumulation of diverse proteins in various organs is the hallmark of the group of protein misfolding disorders (PMDs), including highly prevalent illnesses affecting the central nervous system (CNS) such as Alzheimer's disease (AD) and Parkinson's disease (PD). In this review we discuss the current understanding of the mechanisms implicated in the formation of protein aggregates in the endocrine pancreas and associated toxicity in the light of the long-standing knowledge from neurodegenerative disorders associated with protein misfolding.