Hemodynamic stress in concert with metabolic pathways that are activated by hyperglycemia, glycated proteins, and oxidative stress induce a host of growth factors in the kidney. The fibrogenic cytokine transforming growth factor-beta (TGF-beta), through its Smad3 signaling pathway, is the etiologic agent of renal hypertrophy and the accumulation of mesangial extracellular matrix components in diabetes. Neutralizing anti-TGF-beta antibodies, antisense TGF-beta1 oligodeoxynucleotides or knocking off the Smad3 gene prevent and/or reverse the hypertrophic and profibrotic effects of the diabetic state in mice. However, there is limited evidence to support a role for TGF-beta in the development of albuminuria. Podocyte-derived vascular endothelial growth factor (VEGF), a permeability and angiogenic factor whose expression is also increased in animal models of diabetic kidney disease, appears to act in a novel autocrine signaling mode to induce the podocytopathy of diabetes, especially the genesis of albuminuria. Future strategies for therapy of diabetic nephropathy may therefore need to involve interception of both the TGF-beta and the VEGF signaling pathways to counter the matrix accumulation and to improve the albuminuria. Interception of the renin-angiotensin system may achieve this goal but other novel strategies will need to be developed that would be more efficacious. However, a note of caution should be raised not to lower the heightened activities of these two signaling pathways much below normal levels because a basal activity for each is essential for the optimal homeostasis of glomerular cells.