The increased prevalence of diabetes mellitus has caused a rise in the occurrence of its chronic complications, such as diabetic nephropathy (DN), which is associated with elevated morbidity and mortality. Familial aggregation studies have demonstrated that besides the known environmental risk factors, DN has a major genetic component. Therefore, it is necessary to identify genes associated with risk for or protection against DN. Ecto-nucleotide pyrophosphatase/phosphodiesterase 1 (ENPP1) is expressed in several tissues, including the kidneys. Increased levels of ENPP1 expression inhibit tyrosine-kinase activity of the insulin receptor in several cell types, leading to insulin resistance. K121Q polymorphism of the ENPP1 gene seems to be associated with insulin resistance and DN development. The elucidation of genetic factors and their associations will provide better understanding of the pathogenesis of DN and, may consequently, lead to a more effective approach to prevention and treatment.