Type 1 diabetes is an autoimmune disease. Here the cells of the pancreas that produce insulin called the beta cells are attacked by the body and lead to an absolute deficiency of insulin. As such Type 1 diabetes always needs insulin for treatment. However, lifestyle factors are also important in its management although the cause of diabetes is not lifestyle factors. There is a risk of diabetic ketoacidosis. It is weakly inherited (5%). It is the commonest type of diabetes in childhood but can present well into adulthood and later years eg in 60s and 70s.
Type 2 diabetes on the other hand is a disease of insulin resistance. This means that there is nothing inherently wrong with the pancreas but the body requires much larger amounts of insulin to get the glucose from the blood to the cells. In the face of this increased demand, it fails to keep up. It is very strongly inherited (upto 60%), its cause is multifactorial and usually presents in adults although we are now starting to see it in people in their teens and 20s given the increase in obesity. Can occur in conjunction with other vascular risk factors such as high BP and cholesterol.
Type 2 diabetes can be treated with lifestyle measures in conjunction with a range of oral medications and injectable agents that are not insulin. These aim at variously reducing insulin resistance, making the body more sensitive to the insulin it produces or increasing the amount the body produces. Type 2 diabetes can require insulin too but this does not change the Type of diabetes you have.
I will say for completeness that there are some other types of diabetes that are rarer such as secondary diabetes from pancreatitis or inflammation of the pancreas and genetic disease that cause diabetes.
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