Diabetic nephropathy remains a leading cause of endstage renal disease (ESRD) in western societies, accounting for about 40% of all patients beginning renal replacement therapy. Patients with type 2 diabetes comprise the largest and fastest growing single disease group requiring renal replacement therapy. In addition to the high risk of progression to ESRD, diabetic nephropathy is associated with a very high risk of cardiovascular (CV) morbidity and mortality, which is not abolished by dialysis or renal transplantation. Over the past two decades there have been major advances in our attempts to understand the risk factors for development and progression of diabetic renal dysfunction, that have resulted in better characterisation of the natural history of this serious complication. Effective antihypertensive treatment and aggressive management of CV risk factors have helped improve the prognosis of patients with overt diabetic nephropathy, particularly those with type 1 diabetes. However, for the larger proportion of patients with type 2 diabetes, the renal and CV prognoses are still poor. Recently, more focus has been placed on treating diabetic patients early in order to prevent future organ damage. Microalbuminuria is an