During 2007, approximately 110,000 persons in the United States and Puerto Rico began treatment for end-stage renal disease (ESRD) (i.e., kidney failure requiring dialysis or transplantation). Diabetes is the leading cause of ESRD in the United States, accounting for 44% of new cases in 2007. Although the number of persons initiating treatment for kidney failure each year who have diabetes listed as a primary cause (ESRD-D) has increased since 1996, ESRD-D incidence among persons with diagnosed diabetes has declined since 1996. To determine whether this decline occurred in every U.S. region and in every state, CDC analyzed 1996-2007 data from the U.S. Renal Data System (USRDS) and the Behavioral Risk Factor Surveillance System (BRFSS). During the period, the age-adjusted rate of ESRD-D among persons with diagnosed diabetes declined 35% overall, from 304.5 to 199.1 per 100,000 persons with diagnosed diabetes, and declined in all U.S. regions and in most states. No state showed a significant increase in the age-adjusted ESRD-D rate. Continued awareness of risk factors for kidney failure and interventions to improve diabetes care are needed to sustain and improve these trends.