Aim: Type 2 diabetes and diabetic nephropathy are associated with multiple genetic variables. This study aimed to investigate the role of the vitamin D receptor (VDR) BsmI gene polymorphism and the serum level of vitamin D in Egyptian patients with diabetic nephropathy and type 2 diabetes. Material and Methods: This study involved 80 patients with type 2 diabetes without nephropathy (T2DM), 80 patients with diabetic nephropathy (DN) and 100 healthy individuals as controls. VDR BsmI gene polymorphisms were determined by PCR-RFLP, and vitamin D serum levels were determined by the electrochemiluminescence binding assay. Results: The distribution frequencies of the Bb, bb and Bb+bb genotypes in patients with DN were significantly different from those in the controls (p<0.001) and in those with T2DM (p<0.001). In addition, the b allele frequency was significantly higher in the DN group than the healthy control (OR=6.3, 95% CI, 3.7-10.7, (p<0.001) and T2DM groups (OR=1.91, 95% CI 4.0-13.5, p<0.001). The patients with DN had significantly lower levels of serum vitamin D than both the healthy controls and T2DM patients (p<0.001). Using multivariate regression analysis, diabetes duration, HbA1C, vitamin D deficiency and BsmI genotype were found to be independent risk factors for DN (p=0.019, 0.036, 0.001, 0.035, respectively). Conclusion: The VDR BsmI gene polymorphism and vitamin D deficiency are risk factors for type 2 diabetes and diabetic nephropathy.