Up to a third of people with diabetes mellitus suffer end-stage renal failure due to diabetic nephropathy. Strategies to delay progression of diabetic nephropathy-including glycemic and blood pressure control, modification of the renin-angiotensin system and management of lipid levels with statins-have been effective, but development of new strategies is essential if the ever-increasing burden of this disease is to be minimized. Thiazolidinediones (TZDs) are a family of compounds used as oral hypoglycemic agents in patients with type 2 diabetes mellitus. The therapeutic effects of TZDs are largely a function of their activity as ligands of peroxisome proliferator-activated receptor gamma (PPARgamma), a transcription factor that has a central role in adipogenesis and insulin sensitization. In vitro animal and clinical studies have shown that TZDs ameliorate symptoms and pathogenic mechanisms of diabetic and nondiabetic nephropathy, including proteinuria, excessive deposition of glomerular matrix, cellular proliferation, inflammation and fibrosis. Many of these favorable effects occur under both normal and high-glucose conditions. The mechanisms responsible probably involve both PPARgamma-dependent and PPARgamma-independent pathways. So, TZDs and other agonists of PPARgamma offer promise for treatment of diabetic nephropathy; however, before their putative renoprotective effects can be translated into clinical practice, the complex mechanisms of PPARgamma activity and regulation will need to be investigated further.