In search of genetic determinants of susceptibility to diabetic nephropathy, we examined the association between DNA sequence differences at the locus of angiotensin I-converting enzyme (ACE) and renal complications in 151 insulin-dependent diabetes mellitus (IDDM) patients with a diabetes duration of 16-21 years. This nested case-control study included 77 normoalbuminuric control subjects (albumin excretion rate < 30 micrograms/min) and 74 cases with evidence of nephropathy ranging from microalbuminuria to overt proteinuria. DNA from each of these patients was genotyped at the ACE locus by a three-allele restriction fragment-melting polymorphism (RFMP) (Dde I), which we described recently, and a two-allele insertion/deletion recognized as an Xba I restriction fragment-length polymorphism, which has been shown by other investigators to be associated with serum levels of ACE and with risk of myocardial infarction. The least common allele of the Dde I RFMP was significantly more frequent among cases with nephropathy than among normoalbuminuric control subjects (12.8 vs. 4.5%, P < 0.05). The deletion in the ACE gene was also more frequent in case than in control subjects (56.1 vs. 47.4%), but the difference was not statistically significant (P < 0.25) with this sample size. To determine the independence of these associations, the two polymorphisms were analyzed jointly to identify Xba I/Dde I haplotypes. As might be expected, carriers of the Xba I/Dde I '+ =' haplotype had a fourfold risk of developing diabetic nephropathy (odds ratio [OR] 4.0, 95% confidence interval [CI] 1.5-11.0). However, this did not explain all of the excess Xba I '+' allele among cases.(ABSTRACT TRUNCATED AT 250 WORDS)