Diabetic nephropathy is associated with an altered lipid profile characterized by elevated triglyceride rich lipoproteins, present even in the earlier stages of the renal disease. Although many experimental studies have demonstrated a significant deleterious role for hyperlipidemia in both the initiation and progression of renal injury, data remain more conflicting in humans. A few prospective studies, mostly in type 2 diabetes, have suggested an independent role for serum cholesterol level in the subsequent development of incipient or overt diabetic nephropathy. Furthermore, studies have reported in both types of diabetes an independent deleterious influence of serum total cholesterol on the decline in renal function and/or progression of albuminuria. However, the majority of these studies were post hoc analyses of previously controlled therapeutic trials with several observational studies not confirming these findings. It remains controversial whether apolipoprotein E gene polymorphism is an important factor in the development of diabetic nephropathy. Most of the interventional studies with lipid-lowering therapy in diabetic nephropathy have used HMG CoA reductase inhibitors and have been inconclusive. This may be due to a too short follow-up or insufficient number of patients. Further larger prospective studies are therefore required to better ascertain the role of lipids in the progression of diabetic nephropathy.