Background: Excessive flux through the polyol pathway has long been thought to be involved in the pathogenesis of diabetic microvascular complications. Aldose reductase (AR) is the first and rate-limiting enzyme in the pathway that catalyses the reduction of glucose to sorbitol. A frequent C-106T polymorphism in the promoter of the AR gene has been described, which may change the expression of the gene. The aim of the study was to examine if the C-106T polymorphism was associated with diabetic nephropathy. Material and Methods: We collected 444 patients with type 2 diabetes and divided them into three groups according to the renal status: 162 patients with normoalbuminuria, 153 with microalbuminuria and 129 with persistent proteinuria. Each subject was genotyped for the C-106 polymorphism using the PCR-based RFLP protocol. Results: When the whole study population was analysed, no distortion in the genotype frequency among the study groups was observed. When we stratified the study population by HbA1c we found that in patients with HbA1c ≧9% (median) the CT and TT genotypes were more frequent in patients with diabetic nephropathy (proteinuria and microalbuminuria) than those with normoalbuminuria (OR 2.04, 95% CI 1.12–3.74). Conclusion: The C-106T polymorphism in the AR gene is a risk factor for development of diabetic nephropathy in type 2 diabetes in patients with poor glycaemic control.