Diabetic nephropathy is the most common indication for long-term renal replacement therapy. In type 1 diabetes, it is rare after less than 10 or more than 35 years of disease, while the incidence in type 2 diabetes is related to the duration of diabetes. It is characterised histologically by mesangial expansion, glomerular basement membrane thickening, and glomerulosclerosis. Glomerular hyperfiltration is usual in the early stages of disease, and is thought to be an important mediator of the observed histological features. Hyperglycaemia-induced biochemical abnormalities, notably the formation of advanced glycation end products, overactivity of the polyol pathway, and protein kinase C activation, play a role in the pathogenesis; genetic factors are also implicated. Glycaemic control is of proven benefit in the early, often clinically silent stages of disease. When significant proteinuria and renal impairment have supervened, blood pressure control and reduction of proteinuria by means of angiotensin-converting enzyme inhibitors and angiotensin II receptor antagonists are the most effective therapies to delay progression.