Diabetic nephropathy is a major cause of morbidity and mortality in patients with diabetes and occurs in about one-third of such patients. The course of nephropathy has become better defined, with patients initially developing microalbuminuria (albumin excretion rates [AER] between 20 and 200 micrograms/min), then overt nephropathy (AER > or = 200 micrograms/min) and finally a decline in GFR eventuating in end-stage renal disease (ESRD). Although metabolic control has long been hypothesized as a contributor to the development of nephropathy, it is only in recent years that this hypothesis has been proven. A number of observational studies have shown correlations between glycemic control and the development of various levels of albuminuria and also declines in GFR. Several small, prospective, randomized, interventional studies and the Diabetes Control and Complications Trial (DCCT) have now definitely proven that improved metabolic control that achieves near-normoglycemia can significantly decrease the development and progression of early nephropathy as well as other long-term complications of diabetes, including retinopathy and neuropathy. It is now conceivable that the achievement of near-normoglycemia plus the addition of angiotensin-converting enzyme inhibitors if microalbuminuria develops may greatly decrease the numbers of patients eventually requiring renal replacement therapy.