Aims: The Z-2 allele of the (AC)n polymorphism in the aldose reductase gene (ALR2) confers increased risk of microvascular diabetic complications, whereas the Z+2 allele has been proposed to be a marker of protection. However data are conflicting. Therefore, we investigated whether this polymorphism is associated with diabetic nephropathy and retinopathy in Type 1 diabetes mellitus in a large case-control study and a family-based analysis. Methods: A total of 431 Type 1 diabetic patients with diabetic nephropathy and 468 patients with longstanding Type 1 diabetes and persistent normoalbuminuria were genotyped for the case-control study. In addition, 102 case trios and 98 control trios were genotyped for a family-based study. Results: Thirteen different alleles were identified. In the case-control study, the Z+2 allele frequency was significantly higher in the normoalbuminuric diabetic than in patients with diabetic nephropathy (0.17 vs. 0.11, P = 0.008), suggesting a protective function of the Z+2 allele. No significant increase in the frequency of the putative risk allele Z-2 was found in patients with diabetic nephropathy vs. controls (0.39 vs. 0.36). No association with diabetic retinopathy was found. Although the results of the transmission of the Z-2 and Z+2 alleles in the independent family-based study were consistent with the association study, the number of informative families was limited and thus differences were not statistically significant. Conclusions: The Z+2 allele of the ALR2 promoter polymorphism is associated with a reduced susceptibility to diabetic nephropathy in Danish Type 1 diabetic patients, suggesting a minor role for the polyol pathway in the pathogenesis of diabetic kidney disease. No association of the ALR2 polymorphism with diabetic retinopathy was found.