The global prevalence of diabetic nephropathy is rising in parallel with the increasing incidence of diabetes in most countries. Unfortunately, up to 40 % of persons diagnosed with diabetes may develop kidney complications. Diabetic nephropathy is associated with substantially increased risks of cardiovascular disease and premature mortality. An inherited susceptibility to diabetic nephropathy exists, and progress is being made unravelling the genetic basis for nephropathy thanks to international research collaborations, shared biological resources and new analytical approaches. Multiple epidemiological studies have highlighted the clinical heterogeneity of nephropathy and the need for better phenotyping to help define important subgroups for analysis and increase the power of genetic studies. Collaborative genome-wide association studies for nephropathy have reported unique genes, highlighted novel biological pathways and suggested new disease mechanisms, but progress towards clinically relevant risk prediction models for diabetic nephropathy has been slow. This review summarises the current status, recent developments and ongoing challenges elucidating the genetics of diabetic nephropathy.