Low serum magnesium concentrations were associated with development of renal failure. We aimed to determine whether magnesium supplementation improves renal function, insulin resistance, and metabolic profiles in patients with diabetic nephropathy. A total of 80 hypomagnesemic patients diagnosed with type 2 diabetes and early-stage nephropathy were recruited. Subjects received either daily magnesium oxide or placebo for 12 weeks. Biochemical and anthropometric variables were measured. Physical activity and dietary intakes were also recorded. This study was approved by the ethics committee of Isfahan University of Medical Sciences and was registered on the Iranian Registry of Clinical Trials website (IRCT registration no. IRCT201404271485N12). Serum magnesium levels were not changed significantly. Although the supplementation did not influence glycemic indices, patients in the magnesium group had greater insulin resistance compared with the placebo group after intervention (0.3 ± 2.3 μIU/mL vs. - 0.04 ± 2.05, P = 0.04). No significant changes were observed in serum total cholesterol, triglycerides, HDL, LDL, and total cholesterol/HDL cholesterol ratio. Furthermore, magnesium did not affect inflammation, serum levels of creatinine, and blood urine nitrogen. However, a marginal decrease in microalbuminuria (- 3.1 ± 2.2 mg/L vs. - 14 ± 9.9, P = 0.09) was observed. Oral magnesium supplementation slightly improved microalbuminuria but resulted in increased insulin resistance in patients with diabetic nephropathy.