Diabetic nephropathy is a major cause of morbidity and mortality in patients with diabetes; it occurs in about one third of such patients. The course of nephropathy is better defined and similar for both type 1 and type 2 diabetes. Patients initially develop microalbuminuria (albumin excretion rates [AERs] between 20 and 200 μg/min), then overt nephropathy (AER ≥ 200 μg/min), and finally a decline in glomerular filtration rate (GFR) eventuating in end-stage renal disease. 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. However, large long-term prospective, randomized, interventional studies have now definitely proven that improved metabolic control that achieves nearnormoglycemia can significantly decrease the development and progression of diabetic 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 medications that inhibit the renin-angiotensin system if microalbuminuria develops, may greatly decrease the numbers of patients eventually requiring renal replacement therapy.