Anaemia is a frequent complication of diabetic nephropathy. It has only recently been recognised that in diabetic patients anaemia is seen not only in preterminal renal failure, but also frequently in patients with only minor derangement of renal function. At any level of glomerular filtration rate (GFR) anaemia is more frequent and severe in diabetic compared to nondiabetic patients. A major cause of anaemia is an inappropriate response of erythropoietin to anaemia. Additional factors are iron deficiency and iatrogenic factors, e.g. ACE inhibitor treatment. When serum creatinine is still normal, the erythropoietin concentration is predictive of more rapid loss of glomerular function. When serum creatinine is elevated, the haemoglobin values are predictive of the rate of progression. It is currently under investigation whether reversal of anaemia attenuates the rate of progression. Because most of the late complications of diabetes (retinopathy, neuropathy, heart disease, peripheral arterial disease) involve ischaemic tissue damage, it would be intuitively plausible that treatment with human recombinant erythropoietin should be beneficial, but definite evidence for this hypothesis is currently not available.