Oxidative stress contributes to the pathogenesis of diabetic nephropathy. In mitochondria, lipoic acid synthase produces α-lipoic acid, an antioxidant and an essential cofactor in α-ketoacid dehydrogenase complexes, which participate in glucose oxidation and ATP generation. Administration of lipoic acid abrogates diabetic nephropathy in animal models, but whether lower production of endogenous lipoic acid promotes diabetic nephropathy is unknown. Here, we crossed mice heterozygous for lipoic acid synthase deficiency (Lias(+/-)) with Ins2(Akita/+) mice, a well characterized model of type 1 diabetes. Double mutant mice had more overt diabetic nephropathy, including microalbuminuria, glomerular basement thickening, mesangial matrix expansion, and hypertension, compared with Lias(+/+)Ins2(Akita/+) controls. We also identified proximal tubules as a major site for generation of superoxide anions during diabetic nephropathy. Mitochondria in proximal tubular cells were particularly sensitive to damage in diabetic mice with reduced lipoic acid production. These results suggest that lipoic acid synthase deficiency increases oxidative stress and accelerates the development of diabetic nephropathy.