The lack of an appropriate animal model that spontaneously develops diabetic nephropathy has been a significant limitation in the search for genetic factors underlying this disease and the development of new therapeutic strategies to prevent progressive renal disease in diabetes. We introgressed the mitochondria and some passenger loci from the FHH/EurMcwi rat into the genetic background of diabetic GK rats, creating a new rat strain, T2DN (T2DN/Mcwi). Despite the high degree of genetic similarity between T2DN and GK rats (97% at 681 loci), diabetes ensues earlier and progresses more severely in T2DN rats. T2DN rats exhibit proteinuria by 6 months of age, accompanied by renal histologic abnormalities such as focal glomerulosclerosis, mesangial matrix expansion, and thickening of basement membranes. These characteristics progress over time, and nearly all T2DN rats exhibit diffuse global glomerulosclerosis with nodule formation and arteriolar hyalinosis by 18 months of age. The histologic changes in the kidney of T2DN rats closely mimic the changes seen in the kidney of patients with diabetes. These results indicate that the T2DN rat is a suitable model for investigating diabetic nephropathy. Here we report the initial genetic and physiological characterization of this new rat model of diabetic nephropathy.