During chronic hyperglycaemia, elevated vascular glucose level causes increased flux through the polyol pathway, which induces functional and morphological changes associated with secondary diabetic complications. Inhibitors of aldose reductase (ARIs) have been widely investigated as potential therapeutic agents, but to date only epalrestat is successfully marketed for treatment of diabetic neuropathy, in Japan. Promising compounds during in vitro studies or in trials with animal models have failed to proceed beyond clinical trials and to everyday use, due to a lack of efficacy or adverse side effects attributed to lack of inhibitor specificity and likely inhibition of the related aldehyde reductase (ALR1). Knowledge of the catalytic mechanism and structures of the current inhibitors complexed with ALR2 are means by which more specific and tightly bound inhibitors can be discovered. This review will provide an overview of the proposed catalytic mechanism and the current state of structure-based drug design.