Oxidative stress has been known to play an important role in the development and progression of diabetic nephropathy, but the intracellular signal transduction pathways regulated by reactive oxygen species (ROS) have not been clearly defined. High glucose (HG) induces intracellular ROS directly via glucose metabolism and auto-oxidation and indirectly through the formation of advanced glycation end products and their receptor binding. ROS mimic the stimulatory effects of HG and upregulate transforming growth factor-beta 1, plasminogen activator inhibitor-1, and extracellular matrix (ECM) proteins by glomerular mesangial cells, thus leading to mesangial expansion. ROS activate other signaling molecules, such as protein kinase C and mitogen-activated protein kinases and transcription factors, such as nuclear factor-kappa B, activator protein-1, and specificity protein 1 leading to transcription of genes encoding cytokines, growth factors, and ECM proteins. Finally, various antioxidants inhibit mesangial cell activation by HG and ameliorate features of diabetic nephropathy. These findings qualify ROS as intracellular messengers and as integral glucose-signaling molecules in glomerular mesangial cells in diabetic nephropathy. With this new concept, ROS assume a greater importance in the pathogenesis of diabetic nephropathy. Future studies elucidating other downstream-signaling molecules activated by ROS in mesangial and other renal cells will allow us to understand the final cellular responses to HG, such as proliferation, differentiation, apoptosis, and ECM accumulation. With this new information, we should be able to develop strategies for a more rational treatment of diabetic nephropathy.