Background: Diabetic nephropathy [DN] is characterized by hypertension, progressive albuminuria, glomerulosclerosis, and decline in glomerular filtration rate (GFR) leading to end state renal disease. Aims and objectives: The objective was to study the effect of leptin levels in Type 2 DN patients and healthy subject. Material and Methods: The case control study included 150 type 2 diabetic patients and 50 apparently healthy subjects as control group. The diabetic patients were classified into three groups, Group I comprised of 54patients with normoalbuminuria, Group II included 78patients with microalbuminuria and Group III included 18 patients with macroalbuminuria. Patients and controls were matched for sex, age and body mass. The following laboratory investigations were done in patients and controls: fasting serum leptin, HbA1c, serum triglyceride, cholesterol, HDL cholesterol, LDL cholesterol, serum creatinine, creatinine clearance and 24 hours urinary albumin. Results: Fasting serum leptin was significantly higher in the microalbuminuric (17.3±3.6µg/L) and the macroalbuminuric (20.4±4.8µg/L) groups compared to control (11.7±3.8 µg/L) group (<0.05, P<0.01) respectively. No significant statistical difference was observed between the normoalbuminuric group (13.3±3.3µg/L) and the control group. There was significant positive and negative correlation between serum leptin and serum triglyceride (r=0.3, P<0.05) and creatinine clearance (r=-0.34, P<0.05) respectively. No significant correlation was seen between serum leptin and BMI, HbA1c%, serum creatinine, cholesterol, HDL cholesterol and LDL cholesterol. Conclusion: Serum leptin levels are elevated in type 2 diabetic patients with microalbuminuria and macroalbuminuria, suggesting that renal leptin degradation is diminished in the early stages of renal disease and this impairment increases with the advancement of the disease.