Nephropathy means kidney disease or damage. Diabetic nephropathy is damage to your kidneys caused by diabetes. In severe cases it can lead to kidney failure. But not everyone with diabetes has kidney damage.The kidneys have many tiny blood vessels that filter waste from your blood. High blood sugar from diabetes can destroy these blood vessels. Over time, the kidney isn't able to do its job as well. Later it may stop working completely. This is called kidney failure. Certain things make you more likely to get diabetic nephropathy. If you also have high blood pressure or high cholesterol, or if you smoke, your risk is higher. Also, Native Americans, African Americans, and Hispanics (especially Mexican Americans) have a higher risk.