Diabetes prevalence is increasing worldwide, mainly due to the increase in type 2 diabetes. Diabetic nephropathy occurs in up to 40% of people with type 1 or type 2 diabetes. It is important to identify patients at risk of diabetic nephropathy and those who will progress to end stage renal disease. In clinical practice, most commonly used markers of renal disease and progression are serum creatinine, estimated glomerular filtration rate and proteinuria or albuminuria. Unfortunately, they are all insensitive. This review summarizes the evidence regarding the prognostic value and benefits of targeting some novel risk markers for development of diabetic nephropathy and its progression. It is focused mainly on tubular biomarkers (neutrophil-gelatinase associated lipocalin, kidney injury molecule 1, liver-fatty acid-binding protein, N-acetyl-beta-d-glucosaminidase), markers of inflammation (pro-inflammatory cytokines, tumour necrosis factor-α and tumour necrosis factor-α receptors, adhesion molecules, chemokines) and markers of oxidative stress. Despite the promise of some of these new biomarkers, further large, multicenter prospective studies are still needed before they can be used in everyday clinical practice.