Diabetic nephropathy is the leading cause of end-stage renal disease. Patients with diabetic nephropathy have a high cardiovascular risk, comparable to patients with coronary heart disease. Accordingly, identification and management of risk factors for diabetic nephropathy as well as timely diagnosis and prompt management of the condition are of paramount importance for effective treatment. A variety of risk factors promotes the development and progression of diabetic nephropathy, including elevated glucose levels, long duration of diabetes, high blood pressure, obesity, and dyslipidemia. Most of these risk factors are modifiable by antidiabetic, antihypertensive, or lipid-lowering treatment and lifestyle changes. Others such as genetic factors or advanced age cannot be modified. Therefore, the rigorous management of the modifiable risk factors is essential for preventing and delaying the decline in renal function. Early diagnosis of diabetic nephropathy is another essential component in the management of diabetes and its complications such as nephropathy. New markers may allow earlier diagnosis of this common and serious complication, but further studies are needed to clarify their additive predictive value, and to define their cost-benefit ratio. This article reviews the most important risk factors in the development and progression of diabetic nephropathy and summarizes recent developments in the diagnosis of this disease.