A key issue in the analysis of outcome trials is the adjustment for baseline covariates that influence the primary outcome. Imbalance of an important covariate between treatment groups at baseline is of considerable concern if one treatment group is favored over another with respect to the hypothesis testing outcome. With the use of the Reduction of Endpoints in NIDDM with the Angiotensin II Antagonist Losartan (RENAAL) study database as an example, the influence of baseline proteinuria on the primary composite endpoint, ESRD, and ESRD or death after adjusting for baseline proteinuria as a continuous covariate was examined. Increasing baseline proteinuria was associated with increased risk for renal events, confirming that proteinuria is an important covariate for renal outcomes. When the randomization was stratified according proteinuria <2000 mg/g or >/=2000 mg/g, within the higher proteinuria stratum (>/=2000 mg/g), patients in the losartan group had a higher baseline mean proteinuria value. When the imbalance was adjusted, an increase in the magnitude and the significance of the risk reduction with losartan for each outcome was observed. No apparent interaction between treatment effect and baseline proteinuria was found, and there was no heterogeneity in the treatment response in patients with different baseline proteinuria levels. After proteinuria was adjusted as a continuous variable, greater treatment effects were observed in the RENAAL study. This effect was due solely to the imbalance in baseline proteinuria. Considering the importance of proteinuria as a risk factor, adjustment for baseline proteinuria as a continuous covariate should be prespecified in the design and analysis of clinical trials involving renal outcomes, even when patients are stratified on the basis of level of proteinuria.