Recent epidemiological studies suggest a positive association between exposure to the environmental pollutant cadmium (Cd) and the incidence and severity of diabetes. In this review, we examine the literature suggesting a relationship between Cd exposure, elevated blood glucose levels, and the development of diabetes. In addition we review human and animal studies indicating that Cd potentiates or exacerbates diabetic nephropathy. We also review the various possible cellular mechanisms by which Cd may alter blood glucose levels. In addition, we present some novel findings from our own laboratories showing that Cd elevates fasting blood glucose levels in an animal model of subchronic Cd exposure before overt signs of renal dysfunction are evident. These studies also show that Cd reduces insulin levels and has direct cytotoxic effects on the pancreas. Together, these findings indicate that Cd may be a factor in the development of some types of diabetes and they raise the possibility that Cd and diabetes-related hyperglycemia may act synergistically to damage the kidney.