How does diabetes cause kidney disease?
When our bodies digest the protein we eat, the process creates waste products. In the kidneys, millions of tiny blood vessels (capillaries) with even tinier holes in them act as filters. As blood flows through the blood vessels, small molecules such as waste products squeeze through the holes. These waste products become part of the urine. Useful substances, such as protein and red blood cells, are too big to pass through the holes in the filter and stay in the blood.
Diabetes can damage this system. High levels of blood sugar make the kidneys filter too much blood. All this extra work is hard on the filters. After many years, they start to leak and useful protein is lost in the urine. Having small amounts of protein in the urine is called microalbuminuria.
When kidney disease is diagnosed early, during microalbuminuria, several treatments may keep kidney disease from getting worse. Having larger amounts of protein in the urine is called macroalbuminuria. When kidney disease is caught later during macroalbuminuria, end-stage renal disease, or ESRD, usually follows.
In time, the stress of overwork causes the kidneys to lose their filtering ability. Waste products then start to build up in the blood. Finally, the kidneys fail. This failure, ESRD, is very serious. A person with ESRD needs to have a kidney transplant or to have the blood filtered by machine (dialysis).
Source : http://www.diabetes.org/living-with-diabetes/complications/kidney-disease-nephropathy.html