Anaemia is an important component of diabetic nephropathy but only recently has it attracted the attention of diabetologists and nephrologists. In diabetic patients, anaemia is the result of diminished erythropoietin production and, to a lesser degree, of increased excretion of erythropoietin in the urine, whereas erythropoietin responsiveness remains unchanged. Although erythropoietin concentrations are predictive of the rate of progression of renal disease, epidemiological studies have failed to show lower haemoglobin concentrations in patients with diabetic compared with non-diabetic renal disease with impaired renal function. However, inappropriately low erythropoietin concentrations and anaemia have been reported in subcohorts of diabetic patients. Further studies are required to determine whether reversal of anaemia has beneficial effects on microvascular and macrovascular diabetic complications, particularly cardiac disease, retinopathy and peripheral arterial disease.