The enzyme glucosaminyl N-deacetylase plays a key role in heparan sulphate biosynthesis since N-deacetylation is a prerequisite for N- and further O-sulphation of the carbohydrate polymer. Diabetes induced inhibition of this enzyme could be an important factor in the development of diabetic nephropathy. In this study glomerular glucosaminyl N-deacetylase activity and urinary albumin excretion were measured in insulin-treated streptozotocin-diabetic rats. Furthermore, in an attempt to provide evidence of genetically dependent differences in the vulnerability of the N-deacetylase enzyme, two closely related rat strains (H and U) were studied. A significant 10% inhibition in enzyme activity was found among rats with mean blood glucose values between 9 and 17 mmol/liter, P < 0.05. There was a pronounced difference between the two rat strains in the vulnerability of the enzyme against blood glucose alterations. The U rat appeared highly sensitive to short-term blood glucose control judged by the correlation between blood glucose and N-deacetylase activity (r = -0.73, P = 0.005, N = 16), where no such correlation was found in the H rat (r = 0.02, P = 0.9, N = 14). Urinary albumin excretion was increased in diabetic H rats and significantly correlated to glomerular N-deacetylase activity (r = -0.62, P = 0.02, N = 14). The U rats developed a 10-fold rise in albumin excretion compared to H rats, but this albuminuria was apparently not related to the presence of diabetes or correlated to glomerular N-deacetylase activity. It is concluded that the diabetes induced inhibition of glucosaminyl N-deacetylase may play an important role in the pathogenesis of diabetic nephropathy.