Twenty-nine patients with type I diabetes mellitus were followed up for at least a year after intramuscular allotransplantation of cultured fetal pancreatic islet cells. The patients were divided into 2 groups with different types of proteinuria. Group 1 (prenephritic stage) consisted of 16 patients with transitory proteinuria and group 2 (nephritic stage)-of 13 with constant proteinuria. Serum beta 2-microglobulin (beta 2 mg) was radioimmunoassayed before transplantation and 7 weeks, 1, 3 to 6 months, and over a year after it. The levels of beta 2 mg appreciably varied in the two groups. In group 2 they were increased on day 7 but later virtually did not differ from the control. In group 1 one patient developed a decreased beta 2 mg level starting from the first up to the sixth months after allotransplantation. The results indicate that diabetic nephropathy may be partially reversed by allotransplantation and hence, this method is recommended for patients with transitory proteinuria.