The aim of the study was to test the hypothesis that in diabetic patients without overt nephropathy there may be a correlation between the activity of natural anticoagulant proteins and glomerular dysfunction. Assays for functional activity of proteins S and C, measurements of urinary albumin excretion, lipid parameters and haemoglobin A1c were performed in 91 patients with type 1 diabetes mellitus and 85 patients with type 2. Patients with type 1 diabetes and microalbuminuria had significantly higher mean age (44.1 +/- 10.9 vs. 37.9 +/- 12.7 years; p<0.05), fibrinogen level (3.75 +/- 1.0 vs. 3.21 +/- 0.8 g/l; p<0.01), protein S activity (92.3 +/- 17.6 vs. 84.5 +/- 15.5%; p<0.05) and higher prevalence of retinopathy (p<0.01) and macrovascular disease (p<0.01) than those with normoalbuminuria. Albumin excretion was significantly correlated to age (r=0.25, p<0.05), fibrinogen level (r=0.39, p<0.01), protein S activity (r=0.27; p<0.05), total cholesterol (r=0.23; p<0.05), apoprotein B (r=0.22; p<0.05), retinopathy (r=0.33; p<0.01) and macrovascular disease (r=0.33; p<0.01). Patients with type 2 diabetes mellitus and microalbuminuria had significantly higher apoprotein B levels (1.17 +/- 0.3 vs. 1.06 +/- 1.2 mg/dl; p<0.05) than those with normoalbuminuria, and apoprotein B was significantly correlated to albumin excretion (r=0.22; p<0.05). In a multivariate model of type 1 diabetes mellitus with fibrinogen, protein S and C activity, cholesterol, triglycerides, haemoglobin A1c, retinopathy, and macrovascular disease as independent parameters (r=0.53; p<0.003), there was significant independent correlation of fibrinogen (beta=0.28; p<0.01), protein S activity (beta=0.27; p<0.05) and retinopathy (beta=0.21; p<0.01) with albumin excretion. We conclude that in type 1 diabetes, relative elevation of fibrinogen level and protein S activity appear in the early stages of development of diabetic nephropathy, and may be related to the pathogenesis of diabetic kidney disease.