Diabetic nephropathy is a major problem for patients and health care systems. The costs of treatment remain high. To confront the ongoing challenge, we need to identify individuals at high risk for initiation and progression of this devastating complication. Risk factors include genetic markers; constitutional factors such as low birthweight; haemodynamic factors, including activation of the RAS system and hypertension; metabolic factors such as glycaemia; and additional factors such as urinary AER and smoking. Modifiable risk factors should be treated aggressively. Potential new markers of risk include indices of increased inflammation, changes in coagulation, endothelial dysfunction, growth factors and cytokines. Application of such markers may in time improve risk assessment and allow new treatment targets to be identified. Interventions that aim to achieve strict glycaemic control and blockade of the renin-angiotensin system have been shown to be effective in clinical trials and are feasible in clinical practice. The ‘natural history’ of diabetic nephropathy can be transformed if these strategies of intensive screening and care are applied, leading both to a lower incidence of diabetic nephropathy and to an improved outcome, with survival exceeding 20 years from onset of overt proteinuria.