Diabetic nephropathy develops in less than half of all patients with diabetes. To study heredity as a possible risk factor for diabetic kidney disease, we examined the concordance rates for diabetic nephropathy in two sets of families in which both probands and siblings had diabetes mellitus. In one set, the probands (n = 11) had no evidence of diabetic nephropathy, with normal creatinine clearance and a urinary albumin excretion rate below 45 mg per day. In the other set, the probands (n = 26) had undergone kidney transplantation because of diabetic nephropathy. Evidence of nephropathy was found in 2 of the 12 diabetic siblings of the probands without nephropathy (17 percent). Of the 29 diabetic siblings of probands with diabetic nephropathy, 24 (83 percent) had evidence of nephropathy (P less than 0.001), including 12 with end-stage renal disease. No significant differences were noted between the sibling groups with respect to the duration of diabetes, blood pressure, glycemic control, or glycosylated hemoglobin levels. Logistic regression analysis found nephropathy in the proband to be the only factor significantly predictive of the renal status of the diabetic sibling. We conclude that diabetic nephropathy occurs in familial clusters. This is consistent with the hypothesis that heredity helps to determine susceptibility to diabetic nephropathy. However, this study cannot rule out the possible influences of environmental factors shared by siblings.