Diabetic nephropathy remains a leading cause of end-stage renal disease (ESRD) in western societies, accounting for over one-third of all patients beginning renal replacement therapy. Patients with Type 2 diabetes comprise the largest and fastest-growing single disease group requiring renal support therapy. In addition to the high risk of progression to ESRD, diabetic nephropathy is associated with a very high risk of cardiovascular morbidity and mortality, which is not abolished by dialysis and renal transplantation. While the prognosis of patients with diabetic nephropathy has considerably improved, a greater focus has recently been placed on treating diabetic patients early in order to prevent future organ failure. Microalbuminuria is an important intermediary end-point that correlates strongly with future advanced renal disease and cardiovascular mortality. Recent evidence indicates that optimum glycaemic control, tight blood pressure control, and the regular screening for and early treatment of microalbuminuria are necessary to prevent the development and progression of diabetic renal disease. By utilizing such strategies, the challenge is to reduce the cumulative incidence of overt nephropathy, with its associated increase in cardiovascular mortality, and the requirement for renal support therapy. Over the next 5-10 years, the patient with Type 2 diabetes will need to be the specific focus of such preventive treatment modalities.