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Background. One of the most common complications of diabetes mellitus (DM) is diabetic nephropathy (DN). Angiotensin- converting enzyme (ACE) gene was the first candidate gene of renin-angiotensin system (RAS) for predisposition to DN.Objective. Investigation whether the ACE insertion/deletion (I/D) polymorphism is associated with Egyptian type 2 diabetic patients (T2DM) with nephropathy. In addition, the study investigated the relationship between variants of ACE I/D gene polymorphism and serum ACE level and the progression of nephropathy in Egyptian T2DM patients.Methods. A total of 85 T2DM patients (45 with nephropathy and 40 without nephropathy) besides 45 healthy (non-diabetic) age-matched subjects were recruited in this study for comparison. The (I/D) polymorphism of the ACE gene was investigated using PCR and serum ACE levels were determined using ELISA.Results. The frequency of ACE DD genotype and D allele was significantly higher in DN patients when compared to control healthy subjects and diabetic patients without nephropathy. In addition our results showed a significant association between DD genotype of ACE gene and elevated serum ACE level.Conclusion. The present study showing a strong association between the D allele and/or DD homozygous of ACE gene and diabetic patients developed nephropathy. In addition, individuals with D allele have higher levels of serum ACE compared to those having I allele. ACE gene polymorphism and serum ACE level may serve as a susceptibility biomarker for nephropathy in type 2 diabetic patients.