Aims Our aim was to evaluate the markers of tubulointerstitial damage, neutrophil gelatinase-associated lipocalin (NGAL) and kidney injury molecule 1 (KIM1) in Type 1 diabetic patients with different levels of albuminuria and in control subjects. In addition, the effect of renoprotective treatment on urinary NGAL was evaluated in diabetic nephropathy. Methods This was a cross-sectional study in 58 normoalbuminuric (u-albumin < 30mg/24 h), 45 microalbuminuric (30-300 mg/24 h) and 45 macroalbuminuric (> 300 mg/24 h) Type 1 diabetic patients and 55 non-diabetic control subjects. Furthermore, in a second study, urine-NGAL was measured in a randomized cross-over study of 56 Type 1 diabetic patients with diabetic nephropathy treated with lisinopril 20, 40 and 60 mg daily. Results Urine-NGAL levels were [geometric mean (95% CI)]: control subjects 74 (52-104) (pg/mmol creatinine), normoalbuminuric 146 (97-221), microalbuminuric 222 (158-312) and macroalbuminuric group 261 (175-390). Urine-NGAL increased significantly from the normo- to the micro- and further to the macroalbuminuric group (P < 0.05). Urine-NGAL was higher in normoalbuminuric vs. control subjects (P < 0.01). Plasma-NGAL was significantly higher in the normoalbuminuric and macroalbuminuric groups than in the control group. Urine-KIM1 was higher in all diabetic groups than in the control group (P < 0.001), with no difference between diabetic groups. During lisinopril treatment, urine-NGAL was reduced (95% CI) 17% (11-50) (not significant). Conclusions Urine-NGAL and urine-KIM1 (u-KIM1) are elevated in Type 1 diabetic patients, with or without albuminuria, indicating tubular damage at an early stage. Urine-NGAL increases significantly with increasing albuminuria. The ACE inhibitor lisinopril reduced urine-NGAL, but this was not statistically significant.