Diabetes in pregnancy affects 20 million women per year and is associated with increased risk of obesity in offspring, leading to insulin resistance and cardiometabolic disease. Despite the substantial public health ramifications, relatively little is known about the pathophysiological mechanisms underlying obesity in these high-risk children, which creates a barrier to successful intervention. While maternal glucose itself is undeniably a major stimulus upon intrauterine growth, the degree of offspring hyperinsulinism and disturbed lipid metabolism in mothers and offspring are also likely to be implicated in the disease process. The aim of this review is to summarise current understanding of the pathophysiology of childhood obesity after intrauterine exposure to maternal hyperglycaemia and to highlight possible opportunities for intervention. I present here a new unified hypothesis for the pathophysiology of childhood obesity in infants born to mothers with diabetes, which involves self-perpetuating twin cycles of pancreatic beta cell hyperfunction and altered lipid metabolism, both acutely and chronically upregulated by intrauterine exposure to maternal hyperglycaemia.