Background: Diabetic nephropathy is the single most common cause of chronic renal failure. Despite protective treatment with ACE inhibitors and angiotensin receptor blockers, many patients progress to end stage renal disease. Thiamine and benfotiamine have been proposed as protective agents for diabetes complications. Objective: Present study was conducted to see the effect of thiamine on urinary albumin excretion (UAE) in patients with type 2 diabetes and nephropathy. Methods: The study was a hospital based follow–up study where Patients with type 2 diabetes and UAE equivalent to 30–300mg/24h, were randomly assigned to 12 weeks of thiamine (300mg/day) (n= 36) or placebo (n=37). Results: Compared with placebo, thiamine treatment resulted in significant decrease in UAE (p <0.05) and remained constantly low after another 8weeks follow up (p < 0.001). Conclusion: In patients with type 2 diabetes, high dose thiamine treatment for 12 weeks causes regression of UAE, so it can prevent early stage diabetic nephropathy.