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Aim &Objectives: To study the role of oxidative stress causing nephropathy in diabetes mellitus. The earliest indication of nephropathy is microalbuminuria. Materials & Methods: The study included 25 healthy controls, 50 diabetic patients with no nephropathy, serum glutathione and glutathione peroxidase as oxidant and antioxidant is estimated. FBS, PPBS & creatinine is estimated by kit method. Microalbuminuria in the urine sample is estimated by using turbidometric method Results: Lowered glutathione values and elevated glutathione peroxidase values were consistently observed in all the cases indicating the association of oxidative stress in all diabetic patients. Microalbuminuria is observed in all the patients irrespective of the duration of the illness, indicating subclinical damage of microvasculature, probably due to oxidative stress. Conclusions: Thus the study indicates the valuable role of estimating microalbumin excretion values in all diabetic patients periodically right from the earliest stage, so that remedial measures can be instituted to prevent renal failure.