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Background: We previously suggested that micro- albuminuria in the presence of retinopathy may represent a state of real incipient diabetic nephropathy with declining glomerular filtration rate(GFR), while the meaning of microalbuminuria in the absence of retinopathy may be more heterogeneous. This study was performed to further test this hypothesis. Methods: We prospectively followed up the changes in GFR and urinary albumin excretinn rate (UAE) in microalbuminuric NIDDM patients with or without diabetic retinopathy for 3.1 years. Results: 1) Among 45 patients who completed the followup, 27 had retinopathy from the baseline(group A), while 18 patients did not have retinopathy throughout the study(group B). 2) UAE at baseline was not statistically different between the group A and group B. During follow-up, VAE remained stable in the group B patients(40.0 [20.5 ~ 158.0) to 60.0[20.2 ~ 231.0] ug/min, NS). On the other hand, UAE significantly increased in the group A patients(47.9[20.0~186.0] to 140.0[24.5~2862.0] ug/min, P <0.001). 3) Thirty percent of the group A patients(8/27) progressed to overt proteinuria, while 11%(2/18) of the group B patients developed overt proteinuria(NS). 4) GFR significantly decreased both in the group A (113.0+21.2 to 89.1+24.0 mL/min/1.73 m, P < 0,001) and in the group B patients(134.1+27.2 to 121.5+27.3 mL/min/1.73 m, P<0.01). However, the magnitude of change in GFR was significantly higher in the group A than in the group B patients(7.7+7.6 vs 3.9+4.2 mL/min/1.73 m /year, P <0.05), 5) Multiple logistic regression analysis revealed that the presence of retinopathy was a independent risk factor for faster decline in GFR. Conclusion: It appears that clinical course is different in NIDDM patients with microalbuminuria, according to the presence or absence of diabetic retinopathy. Microalbuminuria in the presence of retinopathy predicts aggravation of albuminuria and decline in GFR. In contrast, the renal function in microalbuminuric NIDDM patients in the absence of retinopathy may remain stable for years.