Aims: The tendency to develop diabetic nephropathy is, in part, genetically determined, however this genetic risk is largely undefined. In this proof-of-concept study, we tested the hypothesis that combined analysis of multiple genetic variants can improve prediction. Methods: Based on previous reports, we selected 27 SNPs in 15 genes from metabolic pathways involved in the pathogenesis of diabetic nephropathy and genotyped them in 1274 Ashkenazi or Sephardic Jewish patients with Type 1 or Type 2 diabetes of >10 years duration. A logistic regression model was built using a backward selection algorithm and SNPs nominally associated with nephropathy in our population. The model was validated by using random "training" (75%) and "test" (25%) subgroups of the original population and by applying the model to an independent dataset of 848 Ashkenazi patients. Results: The logistic model based on 5 SNPs in 5 genes (HSPG2, NOS3, ADIPOR2, AGER, and CCL5) and 5 conventional variables (age, sex, ethnicity, diabetes type and duration), and allowing for all possible two-way interactions, predicted nephropathy in our initial population (C-statistic = 0.672) better than a model based on conventional variables only (C = 0.569). In the independent replication dataset, although the C-statistic of the genetic model decreased (0.576), it remained highly associated with diabetic nephropathy (χ2 = 17.79, p<0.0001). In the replication dataset, the model based on conventional variables only was not associated with nephropathy (χ2 = 3.2673, p = 0.07). Conclusion: In this proof-of-concept study, we developed and validated a genetic model in the Ashkenazi/Sephardic population predicting nephropathy more effectively than a similarly constructed non-genetic model. Further testing is required to determine if this modeling approach, using an optimally selected panel of genetic markers, can provide clinically useful prediction and if generic models can be developed for use across multiple ethnic groups or if population-specific models are required.