Renal injury in diabetes mellitus is a major cause of morbidity and mortality in diabetic patients. There is a clear correlation between the degree of glomerular as well as tubulointerstitial lesions and the development of reduced glomerular filtration rate. The important role of hyperglycemia in the genesis of diabetic renal disease has been strengthened by the application of tissue culture techniques. Recent in vitro studies, first in tubular epithelial cells and subsequently in the three glomerular cell types, have provided supportive evidence that high ambient glucose per se stimulates the synthesis of extracellular matrix components. Increased matrix synthesis and decreased degradation are thought to contribute to matrix accumulation in diabetic nephropathy. These processes are not mutually exclusive and they may be operating simultaneously but at different rates, with increased synthesis predominating early and decreased breakdown later in the course of the disease. Likely mediators of the effects of high glucose involve activation of the polyol pathway, altered myo-inositol metabolism, increased protein kinase C activity, and/or nonenzymatic glycation of various matrix proteins. A role for various growth factors, especially transforming growth factor-beta, also seems likely. However, the details of the cell-signaling mechanisms and the putative molecular mediators of the effect of hyperglycemia remain to be firmly established.