Carbonyl compounds in the blood stream tend to accumulate in the kidney of diabetic or end stage renal failure subjects. Previously we isolated cDNA encoding dicarbonyl/L-xylulose reductase (DCXR) from a mouse kidney cDNA library. In the present study, transgenic (Tg) mice were generated to study the functional role of DCXR in the kidney. With a six-fold increase in the DCXR protein expression levels in the kidney, the homozygous Tg mice did not show any notable histological abnormalities. While the elevated DCXR expression was observed throughout the body, its renal distribution was similar to that of the endogenous DCXR protein, namely, the major expression site was the collecting tubules, along with moderate expression in other tubules and Bowman's capsule, but it was absent from the interstitial area and glomeruli. The Tg mice were crossed with KK-A(y) diabetic model mice to examine the role of DCXR in the progression of diabetic nephropathy. The resulting progeny, Tg/A(y), showed lighter body weight, lower levels of blood glucose, water uptake and creatinine clearance compared to their +/A(y) littermates. Although remarkable pathological differences were not observed at the microscopic level and in the renal accumulation of carboxymethyl lysine, the data imply that DCXR might function in the metabolism of glucose or carbonyl compounds, and play a protective role in a kidney which is under hyperglycemic pressure. The DCXR Tg mice and the Tg x KK-A(y) hybrid mice, therefore, serve as specific models for carbonyl metabolism in the kidney with diabetic background.