Diabetes is the most important cause of ESRD in the Western world. Type I and II diabetes appear to contribute importantly to ESRD although, obviously, the prevalence of ESRD is higher in Type I. Microalbuminuria may predict later development of overt clinical nephropathy in both Type I and Type II patients. In both diabetes subtypes current evidence favours the dysmetabolism of diabetes as causative. There are clinical observations in Type I and renal morphologic evidence in Type II indicating that risk of nephropathy is, in part, related to the magnitude of hyperglycemia. Institution of strict glycemic control fails to reverse established clinical nephropathy in Type I diabetes. Efforts to determine if precise regulation of blood sugar can prevent nephropathy in patients with Type I and Type II diabetes are currently incomplete.