Recurrence of diabetic nephropathy in the allograft of diabetics with end-stage renal disease who undergo renal transplantation has been reported. We report a case of a patient who underwent cadaveric renal transplantation for end-stage renal disease secondary to chronic glomerulonephritis 13 years ago. He developed steroid-induced, insulin-dependent diabetes mellitus 9 months after transplantation and florid nephrotic syndrome with progressive functional impairment due to biopsy-proven diabetic nephropathy 11 years later. This is, to our knowledge, the first report of de novo diabetic nephropathy in a renal allograft of a patient who was not a diabetic at the time of transplantation. It is suggested that histopathologic changes of diabetes mellitus cannot only recur in a renal allograft, but also can develop de novo and lead to functional impairment and ultimately affect graft survival. In view of increasing patient and graft survival in transplanted diabetic and non-diabetic patients, it is reasonable to anticipate an increased incidence of this complication.