Diabetic nephropathy (DN) clusters in families and specific ethnic groups, suggesting a genetic basis of disease transmission. Identification of DN susceptibility loci should reveal new therapeutic targets but requires accurate phenotyping. A powerful family-based strategy, which is novel to the pursuit of nephropathy genes in type 2 diabetes, is being used to collect a sample for candidate gene and genome scan analyses. Sib pairs that include DN index cases plus (1) sibs concordant for type 2 diabetes and DN (affected sib pairs [ASPs]) and (2) sibs concordant for type 2 diabetes but discordant for DN (discordant sib pairs [DSPs]) are targeted specifically for recruitment. Type 2 diabetes and DN phenotype criteria for index cases include diabetes onset after 38 years of age, duration 10 years or longer, no initial insulin treatment, diabetic retinopathy, end-stage renal disease (ESRD), and history of nephrotic proteinuria. ESRD patients were screened by questionnaire and medical record review (n = 2114). Of 666 patients with ESRD secondary to DN, 227 had a family history of ESRD, 150 had a living diabetic sib, and 124 families were enrolled. Sixty-five families, with 86 diabetic relative pairs (69 sibs, 17 children), have been completely phenotyped. If nephropathy in diabetic sibs is defined as albuminuria greater than 0.3 g/24 h, 31 ASPs and 26 DSPs (diabetic sib with albuminuria <0.3 g/24 h) were identified. Applying more stringent criteria, only 12 ASPs (sib with diabetes >10 years, diabetic retinopathy, and nephrotic proteinuria) and 9 DSPs (sib with diabetes >10 years and normal urine albumin excretion) were identified. Extrapolating from the number of subjects recruited using stringent phenotyping criteria, nearly 10,000 ESRD patients are required for screening to achieve adequate statistical power for linkage analysis (80% power to detect locus-specific relative risk of 2.2 at a lod score of 3.0). Careful phenotyping requires a large recruitment effort but is necessary to reduce population heterogeneity, a strategy that increases the likelihood of identifying DN loci.