Diabetic nephropathy is traditionally considered to be a primarily glomerular disease, although this contention has recently been challenged. Early tubular injury has been reported in patients with diabetes mellitus whose glomerular function is intact. Chronic hypoxia of the tubulointerstitium has been recognized as a mechanism of progression that is common to many renal diseases. The hypoxic milieu in early-stage diabetic nephropathy is aggravated by manifestations of chronic hyperglycemia-abnormalities of red blood cells, oxidative stress, sympathetic denervation of the kidney due to autonomic neuropathy, and diabetes-mellitus-induced tubular apoptosis; as such, tubulointerstitial hypoxia in diabetes mellitus might be an important early event. Chronic hypoxia could have a dominant pathogenic role in diabetic nephropathy, not only in promoting progression but also during initiation of the condition. Early loss of tubular and peritubular cells reduces production of 1,25-dihydroxyvitamin D3 and erythropoietin, which, together with dysfunction of their receptors caused by the diabetic state, diminishes the local trophic effects of the hormones. This diminution could further compromise the functional and structural integrity of the parenchyma and contribute to the gradual decline of renal function.