Using a large-scale genotyping analysis of gene-based single nucleotide polymorphisms (SNPs) in Japanese type 2 diabetic patients, we have identified a gene encoding neurocalcin δ (NCALD) as a candidate for a susceptibility gene to diabetic nephropathy; the landmark SNP was found in the 3′ UTR of NCALD (rs1131863: exon 4 +1340 A vs. G, P = 0.00004, odds ratio = 1.59, 95% CI 1.27–1.98). We also discovered two other SNPs in exon 4 of this gene (+999 T/A, +1307 A/G) that showed absolute linkage disequilibrium to the landmark SNP. Subsequent in vitro functional analysis revealed that synthetic mRNA corresponding to the disease susceptible haplotype (exon 4 +1340 G, +1307 G, +999 A) was degraded faster than mRNA corresponding to the major haplotype (exon 4 +1340 A, +1307 A, +999 T), and allelic mRNA expression of the disease susceptibility allele was significantly lower than that of the major allele in normal kidney tissues. In an experiment using a short interfering RNA targeting NCALD, we found that silencing of the NCALD led to a considerable enhancement of cell migration, accompanied by a significant reduction in E-cadherin expression, and by an elevation of α smooth muscle actin expression in cultured renal proximal tubular epithelial cells. We also identified the association of the landmark SNP with the progression of diabetic nephropathy in a 8-year prospective study (A vs. G, P = 0.03, odds ratio = 1.91, 95% CI 1.07–3.42). These results suggest that the NCALD gene is a likely candidate for conferring susceptibility to diabetic nephropathy.