Diabetes Mellitus is the most common cause of end-stage renal disease (ESRD) and the mortality and morbidity rate of patients on dialysis is high. Survival rate of diabetic patients on dialysis is 61% 2 yrs. and 26% 5 yrs. Transplantation may be a better option than dialysis, as treatment for diabetic patients with ESRD. The aim of the study is to compare the transplant outcome between pre-transplant diabetic patients vs. non-diabetic patients. Also, to compare mortality rate of diabetic patients on dialysis vs. those transplanted. Retrospective data analysis was used to compare the mortality rate between diabetic patients awaiting transplantation (n=336) and diabetic transplanted patients (n=453). Graft and patient survival of diabetic transplanted patients (n=453) compared to non-diabetic transplanted patients (n=1150) transplanted between January 1996 and December 2002. ANOVA, T-test and Kaplan Meier were used for analyses. In post-transplant patients there were no statistically significant differences between diabetic and non-diabetic patients in gender, waiting time, dialysis time, PRA mismatch, CIT, or cadaveric vs. living donors. However, there was a statistically significant difference (p=0.001) in recipient age between diabetic (50.311 yrs) and non-diabetic (45 13 yrs.); BMI, diabetic: 25.34 and non-diabetic: 24.63 (p=0.04), and cholesterol levels diabetic: 192.879 vs. non-diabetic: 18185 (p=0.015). Patient survival in 1 and 5 years were 95.5, 89.5 in diabetic vs 96.4, 91.7 in non-diabetic group (P=0.3). Graft survival for 1 and 5 years, 90.4 and 66.2 respectively, in diabetic vs 91.6 and 73.3 in non-diabetic group (P=0.4). Despite additional risk factors associated with transplantation for diabetic patients, the mortality rate of diabetic patients remaining on dialysis is significantly greater than those transplanted at 20% vs. 8% (p=0.001). However, the post-transplant patient and graft survival of diabetic vs. non-diabetic patients is equivalent. In conclusion, transplantation is the best option for patients who have acquired ESRD due to diabetic nephropathy.