Diabetic nephropathy is a severe long-term complication affecting 35-40% of all diabetic patients. The risk of developing nephropathy seems to be similar in insulin-dependent (IDDM) and non-insulin-dependent diabetes mellitus (NIDDM). Diabetic nephropathy is the most common cause of end-stage renal failure in Europe and the United States and has a significant impact on morbidity and mortality of patients with diabetes. Microalbuminuria and rising blood pressure have been reported to be early signs of renal damage and valuable predictors of progression to overt diabetic nephropathy. Therapeutic interventions include improved diabetes control, antihypertensive therapy, restriction of dietary protein, and correction of general risk factors. All these measures have a proven benefit in either preventing diabetic renal lesions or slowing the rate of decline of renal function. Strict blood sugar control seems to be more important in the early stage of diabetic nephropathy, whereas antihypertensive therapy better preserves renal function in the overt phase of nephropathy with persistent proteinuria. Recent data suggest that ACE-inhibitors have superior effects to other antihypertensive agents, even in normotensive diabetics with microalbuminuria.