Diabetic nephropathy affects up to 30% of all patients with Type 1 (insulin-dependent) diabetes and is associated with a high morbidity and mortality. A number of studies have suggested that, unlike retinopathy or neuropathy, the influence of hereditary factors on the development of nephropathy is strong. Much interest has focused on possible genetic markers indicating an increased risk for developing diabetic nephropathy. It is envisaged that patients with Type 1 diabetes may be screened at diagnosis for increased susceptibility to nephropathy and subsequently have intensified follow up and possibly even prophylactic therapy in order to prevent progression to nephropathy. Two groups of candidate genes have so far been of particular interest: those implicated in the aetiology of hypertension, and those involved in the metabolism of glomerular basement membrane proteins. This article aims to review the evidence suggesting a role for hereditary factors, possible genetic models, and the genetic loci thought to be involved.