Insertion/deletion polymorphism of the Angiotensin I converting enzyme genetically deter-mines most of the plasma ACE activity. Modulation of ACE gene activity might have an im-portant bearing on the rate of progression of renal disease, though its exact role in the neph-ropathy of Type 2 Diabetes is far from clear. This prospective, cross-sectional, observa-tional study was designed to study correlation between Insertion/Deletion polymorphism of ACE gene in diabetic nephropathy. T2DM cases (n=30) were evaluated, regarding duration, onset and degree of of albuminuria, renal insufficiency and hypertension. All patients un-derwent detailed clinical and biochemical evaluation. Genomic DNA intron 16 of the ACE gene was amplified by polymerase chain reaction (PCR), followed by sequencing. Analysis of variance ANOVA was applied to compare. A p value < 0.05 was considered significant. All calculations were performed using SPSS-11.0. The mean age of this study group was 45.21±2.34 yrs. PCR amplification of ACE gene fragment revealed I/I, (n =8) I/D (n = 18 and D/D (n = 4), alleles.Age wise, all three groups were matched (p=0.012), micro and macro-vascular complications were more prevalent in DD type. Mmajority (75%) of patients with II allele took longer to develop overt albumiuria, having lesser hypertension, renal dysfunc-tion, and dyslipidemia than ID and DD allele (p<0.005). On the other hand, Urinary albu-min excretion (UAE), SBP, DBP, TG, S.Cr. and LDL-C were significantly higher (p<0.005), in patients of DD type than II and ID groups. This finding suggests that patients with DD allele of the ACE gene are more likely to have progressive diabetic nephropathy with most of the micro and macro-vascular complications.