Diabetes is now the most common cause of progressive kidney failure leading to dialysis or transplantation. The central pathological feature of diabetic nephropathy is accumulation of extracellular matrix within the glomeruli. The factors in the diabetic milieu responsible for extracellular matrix accumulation are not understood. Here we report that in glomeruli of rats made diabetic there is a slow, progressive increase in the expression of transforming growth factor beta (TGF-beta) mRNA and TGF-beta protein. A key action of TGF-beta is induction of extracellular matrix production, and specific matrix proteins known to be induced by TGF-beta were increased in diabetic rat glomeruli. These proteins include an alternatively spliced form of fibronectin, tenascin, and the proteoglycan biglycan. TGF-beta has not previously been implicated in the matrix accumulation that occurs in the diabetic kidney. Glomeruli from humans with diabetic nephropathy also showed a striking increase in immunoreactive TGF-beta protein and deposition of the special form of fibronectin, whereas glomeruli from normal subjects or from individuals with other glomerular diseases (where extracellular matrix accumulation is not a feature) were negative or barely positive. These results implicate TGF-beta in the pathogenesis of diabetic nephropathy.