The human chromosome 7p21 locus harbors a major gene that influences variation of glomerular filtration rate and development of end-stage renal disease. The pro-inflammatory IL-6 cytokine is a candidate gene since chronic inflammation has been implicated in diabetic nephropathy and this gene is located under the peak of linkage. To test this, single nucleotide polymorphism (SNP) and haplotype analyses were performed using a case-control study of 295 patients consisting of 138 with proteinuria, 157 with chronic renal failure and these were compared to 174 control patients with normal albumin excretion. Five tagging SNPs were selected for analysis based on linkage disequilibrium patterns and proximity to the functionally important -634G>C SNP in the IL-6 promoter. Initial analysis suggested that a -174G>C polymorphism may be associated with risk of chronic renal failure but this was not significant after Bonferroni correction. While haplotype analyses showed no association with proteinuria; a significant association with chronic renal failure was found. There was significantly more of the GGGAGC haplotype among patients with chronic renal failure compared to controls and this association remained significant even after correction for multiple testing. Our study has found a specific IL-6 haplotype conferring risk for impaired renal function in patients with type 2 diabetes.