Diabetic nephropathy is kidney damage caused by hyperglycemia. It can lead to chronic renal failure. The term describes changes in the kidney due to diabetes. They happen in the glomeruli--the filtering structures in the kidney. These changes can be mild enough not to produce any outward signs of the disease. (In this case, they are only identified with a biopsy of the kidney.) Diabetic nephropathy is a very serious condition for all diabetics.