In this double-blind, placebo-controlled study, eligible type 2 diabetic patients with overt nephropathy will be treated for one year with bid doses of either Pyridorin™ 150 mg, Pyridorin™ 300 mg, or placebo. The primary endpoint in the study is the change in serum creatinine (SCr) from baseline after 1 year of therapy. Secondary 1-year endpoints include the slope of SCr, the change in protein/creatinine ratio (PCR) derived from 24-hour urine collections, and the change from baseline and slope of serum cystatin C.