We planned the INNOVATION study to determine whether telmisartan, an angiotensin-2-receptor blocker, delays the progression of renal disease from incipient nephropathy to overt nephropathy in hypertensive or normotensive Japanese patients with type 2 diabetes mellitus. The INNOVATION study is a randomized, double-blind, placebo-controlled trial. Eligible patients must have incipient nephropathy (defined as a urinary albumin to creatinine ratio of 100-300 mg/g creatinine) and a serum creatinine concentration of < 1.5 mg/dl for men and < 1.3 mg/dl for women. Patients who need treatment with angiotensin II receptor blockers or angiotensin-converting enzyme inhibitors are excluded. Eligible patients are randomly assigned to three groups: telmisartan titrated to 40 mg; telmisartan titrated to 80 mg; or placebo. The primary endpoint is the time from baseline visit to first detection of overt nephropathy (defined by a urinary albumin to creatinine ratio that is > 300 mg/g creatinine and 30% higher than the baseline on at least two consecutive visits). A total of 1855 patients have been enrolled from 160 study centres. In 527 randomized patients (28.4% of the enrolled patients), mean (SD) urinary albumin to creatinine ratio and serum creatinine concentration at baseline were 173.3 (47.2) mg/g creatinine and 0.78 (0.19) mg/dl. Sixty-eight per cent of the patients had hypertension at baseline. Mean (SD) systolic and diastolic blood pressures at baseline were 137.1 (14.6) and 77.5 (10.3) mmHg. The INNOVATION study will determine whether telmisartan, an angiotensin II receptor blocker, provides clinical benefits in hypertensive or normotensive patients with diabetes mellitus and diabetic nephropathy.