The clinical manifestations of diabetic nephropathy, proteinuria, increased blood pressure, and decreased glomerular filtration rate, are similar in type 1 and type 2 diabetes; however, the renal lesions underlying renal dysfunction in the 2 conditions may differ. Indeed, although tubular, interstitial, and arteriolar lesions are ultimately present in type 1 diabetes, as the disease progresses, the most important structural changes involve the glomerulus. In contrast, a substantial subset of type 2 diabetic patients, despite the presence of microalbuminuria or proteinuria, have normal glomerular structure with or without tubulointerstitial and/or arteriolar abnormalities. The clinical manifestations of diabetic nephropathy are strongly related with the structural changes, especially with the degree of mesangial expansion in both type 1 and type 2 diabetes. However, several other important structural changes are involved. Previous studies, using light and electron microscopic morphometric analysis, have described the renal structural changes and the structural-functional relationships of diabetic nephropathy. This review focuses on these topics, emphasizing the contribution of research kidney biopsy studies to the understanding of the pathogenesis of diabetic nephropathy and the identification of patients with a higher risk of progression to end-stage renal disease. Finally, evidence is presented that the reversal of established lesions of diabetic nephropathy is possible.