Investigation of renal biopsy specimens from 488 patients with diabetic glomerulosclerosis (DGS) of varying severity revealed the following: 1) The severity of DGS increases with the duration of the diabetes. 2) As the severity of DGS increases, it is complicated with increasing frequency by exudative changes, which correspond in detail to hyperperfusion lesions described in the literature. 3) As the severity of DGS increases, the severity of arteriolosclerosis and the incidence of nephrotic syndrome increase significantly. 4) The 5- and 10-year renal survival rates are highest for those diabetic patients in whom the tubules and renal cortical interstitium are of normal appearance. These survival rates are diminished if any of the following are present at the time of biopsy: a) interstitial fibrosis; b) hyperperfusion lesions; c) nephrotic syndrome; d) elevation of the serum creatinine concentration to more than 1.3 mg%. 5) No significant correlation was found between renal survival rate and age, sex, or type of diabetes. 6) The inflammation of the renal interstitium seen in diabetes does not differ from that seen in chronic glomerulonephritis. Monocytes, macrophages, T lymphocytes, fibroblasts and fibrocytes play the major role in this inflammation. This inflammatory process is considered to represent not pyelonephritis, but rather an auto-immune process. In other words, it is proposed that the diabetic kidney fails not only as a result of non-specific glomerular lesions (hyperperfusion lesions) but also because of non-specific tubulointerstitial changes, whereas diabetic glomerulosclerosis alone does not lead to chronic renal failure.