Diabetic nephropathy, a microvascular complication of diabetes, is clinically characterized by an initial increase in glomerular filtration rate (GFR) and microalbuminuria (Semin Nephrol 23(2), 194–199, 2003). If left untreated, these early pathophysiologic changes will progress to renal fibrosis and tubulointerstitial damage along with a decline in GFR, ultimately leading to kidney failure (Curr Opin Nephrol Hypertens 12(3), 273–282, 2007; J Hypertens 23(11), 1931–1937, 2005). Diabetic nephropathy and its related pathophysiologic alterations in renal microcirculation is thought to develop as a result of the interaction between metabolic and hemodynamic factors that together activate common intracellular pathways that trigger the production of various cytokines and growth factors leading to kidney disease. Persistent elevations in blood glucose alter renal hemodynamics through activation of several vasoactive hormonal pathways, including the renin-angiotensin-aldosterone system, endothelin, and urotensin (Diabet Med 21(Suppl 1), 15–18, 2004; Curr Hypertens Rep 6(2), 98–105, 2004). These hormones then in turn can activate second messenger signaling pathways, including protein kinase C, transcription factors, including NK-κB, and cytokines, including TGF-β, VEGF, and PDGF, all of which can lead to the development of albuminuria, glomerulosclerosis, and tubulointerstitial fibrosis characteristic of diabetic nephropathy (Kidney Int Suppl 106, S49–S53, 2007; Semin Nephrol 27(2), 153–160, 2007). This chapter will provide a detailed review of these hemodynamic and hormonal mechanisms that underlie the development of diabetic nephropathy.