The incidence of diabetic nephropathy (DN) is growing rapidly worldwide as a consequence of the rising prevalence of Type 2 diabetes mellitus (T2DM). Among U.S. ethnic groups, Mexican Americans have a disproportionately high incidence and prevalence of DN and associated end-stage renal disease (ESRD). In communities bordering Mexico, as many as 90% of Mexican American patients with ESRD also suffer from T2DM compared to only 50% of non-Hispanic Whites (NHW). Both socio-economic factors and genetic predisposition appear to have a strong influence on this association. In addition, certain pathogenetic and clinical features of T2DM and DN are different in Mexican Americans compared to NHW, raising questions as to whether the diagnostic and treatment strategies that are standard practice in the NHW patient population may not be applicable in Mexican Americans. This article reviews the epidemiology of DN in Mexican Americans, describes the pathophysiology and associated risk factors, and identifies gaps in our knowledge and understanding that needs to be addressed by future investigations.