Diabetes mellitus (DM) has become an epidemic, causing a significant decline in quality of life of individuals due to its multisystem involvement. Kidney is an important target organ in DM accounting for the majority of patients requiring renal replacement therapy at dialysis units. Microalbuminuria (MA) has been a valuable tool to predict end-organ damage in DM but its low sensitivity has driven research efforts to seek other alternatives. Albumin is taken up by albumin receptors, megalin and cubilin in the proximal tubule epithelial cells. We demonstrated that insulin at physiological concentrations induce albumin endocytosis through activation of protein kinase B (Akt) in proximal tubule epithelial cells. Inhibition of Akt by a phosphorylation deficient construct abrogated insulin induced albumin endocytosis suggesting a role for Akt in insulin-induced albumin endocytosis. Furthermore we demonstrated a novel interaction between Akt substrate 160kDa (AS160) and cytoplasmic tail of megalin. Mice with type 1 DM (T1D) displayed decreased Akt, megalin, cubilin and AS160 expression in their kidneys in association with urinary cubilin shedding preceding significant MA. Patients with T1D who have developed MA in the EDC (The Pittsburgh Epidemiology of Diabetes Complications) study demonstrated urinary cubilin shedding prior to development of MA. We hypothesize that perturbed insulin-Akt cascade in DM leads to alterations in trafficking of megalin and cubilin, which results in urinary cubilin shedding as a prelude to MA in early diabetic nephropathy. We propose that utilization of urinary cubilin shedding, as a urinary biomarker, will allow us to detect and intervene in diabetic nephropathy (DN) at an earlier stage.