Studies using pharmacologic inhibitors have implicated the enzyme aldose reductase in the pathogenesis of albuminuria and diabetic renal disease. However, a clear conclusion is not easily drawn from such studies since these pharmacologic inhibitors have nonspecific properties. To examine further the role of aldose reductase, we have overexpressed the human enzyme in a transgenic rat model. Transgene expression in the kidney was predominantly localized to the outer stripe of the outer medulla, compatible with the histotopography of the straight (S3) proximal tubule. The effect of enzyme overexpression on diabetes-induced renal function and structure was then investigated. Contrary to what may have been anticipated from the previous enzyme inhibition studies, diabetes-induced albuminuria was completely prevented by the overexpression of aldose reductase. No effect of overexpression of aldose reductase on renal structure nor on urinary excretion of beta2-microglobulin and N-acetyl-beta-D-glucosaminidase was observed in this transgenic rat model. In conclusion, our study strongly suggests that multiple roles for aldose reductase may give it a more complex place in diabetic nephropathy than is currently recognized.