Epidemiological studies support the hypothesis that genetic factors modulate the risk for diabetic nephropathy (DN). Aldose reductase (ALDR1), the rate-limiting enzyme in the polyol pathway, is a potential candidate gene. The present study explores the hypothesis that polymorphisms of the (A-C)n dinucleotide repeat sequence, located 2.1 kb upstream of the transcription start site, modulate ALDR1 gene expression and the risk for DN. We conducted studies at two different institutions, the University of New Mexico Health Sciences Center (UNMHSC), and the Istituto Scientifico H San Raffaele (HSR). There were four groups of volunteers at UNMHSC: group I, normal subjects; group II, patients with insulin-dependent diabetes mellitus (IDDM) without DN; group III, IDDM with DN; and group IV, nondiabetics with kidney disease. At HSR we studied volunteers in groups I, II, and III. ALDR1 genotype was assessed by PCR and fluorescent sequencing of the (A-C)n repeat locus, and ALDR1 messenger ribonucleic acid (mRNA) was measured by ribonuclease protection assay in peripheral blood mononuclear cells. At UNMHSC we identified 10 alleles ranging from Z-10 to Z+8. The prevalence of the Z-2 allele among IDDM patients was increased in those with DN. Sixty percent of group III and 22% of group II were homozygous for Z-2. Moreover, 90% and 67% of groups III and II, respectively, had 1 or more copy of Z-2. In contrast, among nondiabetics, 19% of group IV and 3% of group I were homozygous for Z-2, and 69% and 32%, respectively, had 1 copy or more of Z-2. Among diabetics, homozygosity for the Z-2 allele was associated with renal disease [odds ratio (OR), 5.25; 95% confidence interval, 1.71-17.98; P = 0.005]. ALDR1 mRNA levels were higher in patients with DN (group III; 0.113 +/- 0.050) than in group I (0.068 +/- 0.025), group II (0.042 +/- 0.020), or group IV (0.015 +/- 0.011; P < 0.01). Among diabetics, ALDR1 mRNA levels were higher in Z-2 homozygotes (0.098 +/- 0.06) and Z-2 heterozygotes (0.080 +/- 0.04) than in patients with no Z-2 allele (0.043 +/- 0.02; P < 0.05). In contrast, among nondiabetics, ALDR1 mRNA levels in Z-2 homozygotes (0.034 +/- 0.04) and Z-2 heterozygotes (0.038 +/- 0.03) were similar to levels in patients without a Z-2 allele (0.047 +/- 0.03; P = NS). At HSR we identified eight alleles ranging from Z- 12 to Z+2. The prevalence of the Z-2 allele was higher in group III than in group II. In group III, 43% of the patients were homozygous for Z-2, and 81% had one copy or more of the Z-2 allele. In contrast, in group II, 4% were homozygous for Z-2, and 36% had one copy or more of the Z-2 allele. IDDM patients homozygous for Z-2 had an increased risk for DN compared with those lacking the Z-2 allele (OR, 18; 95% confidence interval, 2-159). IDDM patients who had one copy or more of Z-2 had increased risk (OR, 7.5; 95% confidence interval, 1.9-29.4) for DN compared with those without the Z-2 allele. These results support our hypothesis that environmental-genetic interactions modulate the risk for DN. Specifically, the Z 2 allele, in the presence of diabetes and/or hyperglycemia, is associated with increased ALDR1 expression. This interaction may explain the observed association between the Z-2 allele and DN.