Diabetic nephropathy is the leading cause of end-stage renal disease in the world. The cause of diabetic nephropathy seems to be multifactorial, and about one-third of patients with diabetes eventually develop this complication. The gene encoding ectonucleotide pyrophosphatase/phosphodiesterase 1 (ENPP1) is a candidate susceptibility gene for obesity and type 2 diabetes. We assessed rs1044498 (K173Q) located in the ENPP1 gene for association with diabetes nephropathy among 201 diabetic subjects without nephropathy and 215 diabetic subjects with nephropathy in the Taiwanese population. The single-nucleotide polymorphism (SNP) rs1044S498 in ENPP1 was associated with diabetes nephropathy in our study subjects. The AC+CC genotype of the rs1044498 SNP was a risk factor for the development of nephropathy in diabetic patients. Further, the AC+CC genotype of rs1044498 was a genetic risk factor in obese (defined by waist circumference) diabetic patients, but not in nonobese diabetic patients. We confirmed the association between the rs1044498 SNP in ENPP1 and diabetic nephropathy, especially among obese diabetic patients, in the Taiwanese population.