Diabetic nephropathy involves a renal inflammatory response induced by the diabetic milieu. Macrophages accumulate in diabetic kidneys in association with the local upregulation of monocyte chemoattractant protein-1 (MCP-1); however, the contribution of macrophages to renal injury and the importance of MCP-1 to their accrual are unclear. Therefore, we examined the progression of streptozotocin (STZ)-induced diabetic nephropathy in mice deficient in MCP-1 in order to explore the role of MCP-1-mediated macrophage accumulation in the development of diabetic kidney damage. Renal pathology was examined at 2, 8, 12 and 18 weeks after STZ treatment in MCP-1 intact (+/+) and deficient (-/-) mice with equivalent blood glucose and hemoglobin A1c levels. In MCP-1(+/+) mice, the development of diabetic nephropathy was associated with increased kidney MCP-1 production, which occurred mostly in tubules, consistent with our in vitro finding that elements of the diabetic milieu (high glucose and advanced glycation end products) directly stimulate tubular MCP-1 secretion. Diabetes of 18 weeks resulted in albuminuria and elevated plasma creatinine in MCP-1(+/+) mice, but these aspects of renal injury were largely suppressed in MCP-1(-/-) mice. Protection from nephropathy in diabetic MCP-1(-/-) mice was associated with marked reductions in glomerular and interstitial macrophage accumulation, histological damage and renal fibrosis. Diabetic MCP-1(-/-) mice also had a smaller proportion of kidney macrophages expressing markers of activation (inducible nitric oxide synthase or sialoadhesin) compared to diabetic MCP-1(+/+) mice. In conclusion, our study demonstrates that MCP-1-mediated macrophage accumulation and activation plays a critical role in the development of STZ-induced mouse diabetic nephropathy.