Diabetic kidney disease, diagnosed by urinary albumin excretion rate (AER), is a critical symptom of chronic vascular injury in diabetes, and is associated with dyslipidemia and increased mortality. We investigated serum lipids in 326 subjects with type 1 diabetes: 56% of patients had normal AER, 17% had microalbuminuria (20 ≤ AER < 200 μg/min or 30 ≤ AER < 300 mg/24 h) and 26% had overt kidney disease (macroalbuminuria AER ≥ 200 μg/min or AER ≥ 300 mg/24 h). Lipoprotein subclass lipids and low-molecular-weight metabolites were quantified from native serum, and individual lipid species from the lipid extract of the native sample, using a proton NMR metabonomics platform. Sphingomyelin (odds ratio 2.53, P < 10(-7)), large VLDL cholesterol (odds ratio 2.36, P < 10(-10)), total triglycerides (odds ratio 1.88, P < 10(-6)), omega-9 and saturated fatty acids (odds ratio 1.82, P < 10(-5)), glucose disposal rate (odds ratio 0.44, P < 10(-9)), large HDL cholesterol (odds ratio 0.39, P < 10(-9)) and glomerular filtration rate (odds ratio 0.19, P < 10(-10)) were associated with kidney disease. No associations were found for polyunsaturated fatty acids or phospholipids. Sphingomyelin was a significant regressor of urinary albumin (P < 0.0001) in multivariate analysis with kidney function, glycemic control, body mass, blood pressure, triglycerides and HDL cholesterol. Kidney injury, sphingolipids and excess fatty acids have been linked in animal models-our exploratory approach provides independent support for this relationship in human patients with diabetes. ELECTRONIC SUPPLEMENTARY MATERIAL: The online version of this article (doi:10.1007/s11306-011-0343-y) contains supplementary material, which is available to authorized users.