Background and aim: Diabetic Nephropathy (DN) is a major microvascular complication in Type 2 diabetes mellitus (T2DM). Several environmental and genetic factors play a pivotal role in the development and pathogenesis of DN. The angiotensin-converting enzyme (ACE) gene insertion (I)/deletion (D) polymorphism is one of the various genetic factors associated with DN. This study was undertaken to assess the frequency and distribution of ACE I/D polymorphism in T2DM with and without nephropathy patients and controls. Materials and methods: We conducted a case-control study. In a population of 61 patients suffering from T2DM without nephropathy and 61 patients T2DM with nephropathy along with the 52 age matched controls in Saudi populations. ACE I/D polymorphism was detected by PCR amplification using allele specific primers and some biochemical and behavioral markers were monitored. Chi-square and multiple logistic regression analyses were done to determine the odds ratio for development of nephropathy. Results: The observed genotype frequencies of II, ID and DD in T2DM with nephropathy were 8.2%, 34.4% and 57.4%, in T2DM without nephropathy 16.4%, 44.2% and 39.4%, in control 30.8%, 48.1%, 21.1% respectively. The DD genotype of the T2DM with nephropathy group was higher than the T2DM without nephropathy patients (OR=2.075, 95% CI: 1.008-4.272, p=0.047). Conclusion: The study illustrated that significant association was observed between the D allele, DD genotype of the ACE gene polymorphism and T2DM with nephropathy in Al- Quwayiyah region of Saudi Arabia. We suggest potential and new multi-property of ACE inhibitors therapy for the prevention or delay of progression of nephropathy.