Diabetic nephropathy is the leading cause of end-stage renal disease. Diabetes mellitus is characterized by generalized endothelial dysfunction. However, recent data also emphasizes the role of local renal endothelium dysfunction in the pathogenesis of diabetic nephropathy. Hyperglycemia triggers a complex network of signal-transduction molecules, transcription factors, and mediators that culminate in endothelial dysfunction. In the glomerulus, vascular endothelial growth factor-A (VEGF)-induced neoangiogenesis may contribute to the initial hyperfiltration and microalbuminuria due to increased filtration area and immaturity of the neovessels, respectively. However, subsequent decrease in podocytes number decreases VEGF production resulting in capillary rarefaction and decreased glomerular filtration rate (GFR). Decreased nitric oxide availability also plays a significant role in the development of advanced lesions of diabetic nephropathy through disruption of glomerular autoregulation, uncontrolled VEGF action, release of prothrombotic substances by endothelial cells and angiotensin-II-independent aldosterone production. In addition, disturbances in endothelial glycocalyx contribute to decreased permselectivity and microalbuminuria; whereas there are recent evidences that reduced glomerular fenestral endothelium leads to decreased GFR levels. Endothelial repair mechanisms are also impaired in diabetes, since circulating endothelial progenitor cells number is decreased in diabetic patients with microalbuminuria. Finally, in the context of elevated profibrotic cytokine transforming growth factor-β levels, endothelial cells also confer to the deteriorating process of fibrosis in advanced diabetic nephropathy through endothelial to mesenchymal transition.