Introduction: Homocysteine is recently speculated as an indicator for the development of diabetic nephropathy. Objective: To assess homocysteine in various stages of diabetic nephropathy and its correlation with other biochemical parameters. Methods: A mini questionnaire, and analysis of blood and urine were employed in 120 patients with type 2 diabetes (40 normo-, 40 micro- and 40 macroalbuminuric) and 40 non-diabetic controls. Results: Urinary albumin was significantly elevated in patients with normoalbuminuria (22.3__ampersandsignplusmn;5.2 mg/g), microalbuminuria (146.7__ampersandsignplusmn;80.7 mg/g) and macroalbuminuria (348.0__ampersandsignplusmn;37.6 mg/g) than controls (15.9__ampersandsignplusmn;4.8 mg/g), in microalbuminuria and macroalbuminuria versus normoalbuminuria, and in macroalbuminuria versus microalbuminuria. There were also significant increases in serum urea and creatinine in diabetic groups. Serum homocysteine behaves like urinary albumin in being significantly higher in diabetic groups (17.1__ampersandsignplusmn;4.8, 20.3__ampersandsignplusmn;5.9 and 22.9__ampersandsignplusmn;5.5 __ampersandsignmicro;mol/l, respectively) than controls (13.4__ampersandsignplusmn;3.7 __ampersandsignmicro;mol/l), in microalbuminuria and macroalbuminuria versus normoalbuminuria, and in macroalbuminuria versus microalbuminuria. Serum glucose, HbA1c, cholesterol, triglycerides and LDL-C were significantly increased whereas HDL-C was significantly decreased in diabetic groups. There were significant positive correlations of serum homocysteine with urinary albumin (r=0.564, P__ampersandsignlt;0.001), urea (r=0.654, P__ampersandsignlt;0.001), creatinine (r=0.561, P__ampersandsignlt;0.001), glucose (r=0.465, P__ampersandsignlt;0.001), HbA1c (r=0.517, P__ampersandsignlt;0.001), and triglycerides (r=0.320, P=0.001) whereas HDL-C showed significant negative correlation (r=-0.517, P__ampersandsignlt;0.001). Conclusion: Increment of serum homocysteine accompanied with elevation of urinary albumin, urea, creatinine and HbA1c, could innominate homocysteine as a novel biomarker for trans change to diabetic nephropathy.