The convergence of advances in medical science, human biology, data science and technology has enabled the generation of new insights into the phenotype known as 'diabetes'. Increased knowledge of this condition has emerged from populations around the world, illuminating the differences in how diabetes presents, its variable prevalence and how best practice in treatment varies between populations. In parallel, focus has been placed on the development of tools for the application of precision medicine to numerous conditions. This Consensus Report presents the American Diabetes Association (ADA) Precision Medicine in Diabetes Initiative in partnership with the European Association for the Study of Diabetes (EASD), including its mission, the current state of the field and prospects for the future. Expert opinions are presented on areas of precision diagnostics and precision therapeutics (including prevention and treatment) and key barriers to and opportunities for implementation of precision diabetes medicine, with better care and outcomes around the globe, are highlighted. Cases where precision diagnosis is already feasible and effective (i.e. monogenic forms of diabetes) are presented, while the major hurdles to the global implementation of precision diagnosis of complex forms of diabetes are discussed. The situation is similar for precision therapeutics, in which the appropriate therapy will often change over time owing to the manner in which diabetes evolves within individual patients. This Consensus Report describes a foundation for precision diabetes medicine, while highlighting what remains to be done to realise its potential. This, combined with a subsequent, detailed evidence-based review (due 2022), will provide a roadmap for precision medicine in diabetes that helps improve the quality of life for all those with diabetes.