Microalbuminuria is diagnosed when the UAER is > 20 but < 200 μg/min. The prevalence of microalbuminuria among diabetic patients is 15–20%. Persistent microalbuminuria in diabetic patients is a risk marker not only of renal disease, but also of proliferative retinopathy and cardiovascular morbidity and mortality. Even among nondiabetic individuals, those with microalbuminuria tend to have an increased cardiovascular morbidity. The established cardiovascular risk factors, such as smoking, elevated plasma cholesterol, fibrinogen, and hypertension, are seen more frequently in diabetic patients with persistent microalbuminuria than in normoalbuminuric diabetic patients of similar age, sex, and diabetes duration. However, these risk factors cannot by themselves explain the cardiovascular overmortality in these patients. In addition, insulin resistance or genetic disposition to hypertension or cardiovascular disease fails to be the missing link. Accumulating evidence suggests a common pathogenetic mechanism for microalbuminuria and premature atherosclerosis (i.e., qualitative alterations of the extracellular matrix, including decreased density and sulfation of HS-PG). Decreased density of HS in the glomeruli may lead to albuminuria and mesangial proliferation. In the intima of large vessel walls, decreased density and/or sulfation of HS may enhance several of the processes involved in premature atherosclerosis. Diabetes affects the composition and structure of the extracellular matrix in many ways and leads to decreased density and sulfation of HS-PG by several mechanisms. Genetic differences in the sulfation of HS and/or genetic defects in the coordinated biosynthesis of HS-PG might contribute to decreased concentration and sulfation of HS-PG in susceptible individuals. It is hoped that susceptibility genes can be identified soon, thereby making prevention of severe late diabetic complications more successful.