The influence of β-cell function on cardiovascular autonomic neuropathy (CAN), an important diabetes-related complication, is still unclear. In this study, we aimed to investigate the association between residual β-cell function and CAN in patients newly diagnosed with type 2 diabetes. We enrolled 90 newly-diagnosed type 2 diabetic patients and 37 participants with normal glucose tolerance as controls. The patients were divided into a CAN+ group (diabetic patients with CAN, n = 20) and a CAN− group (diabetic patients without CAN, n = 70) according to the standard Ewing battery of tests. Fasting and postprandial plasma glucose, insulin, and C-peptide were measured. Homeostasis model assessment-beta cells (HOMA-B) and HOMA-insulin resistance (IR) were calculated. The prevalence of CAN in this population was 22.2%. Compared with the CAN− group, the CAN+ group had significantly lower fasting plasma insulin (6.60 ± 4.39 vs 10.45 ± 7.82 μ/L, P = 0.029), fasting C-peptide (0.51 ± 0.20 vs 0.82 ± 0.51 nmol/L, P = 0.004), and HOMA-B (21.44 ± 17.06 vs 44.17 ± 38.49, P = 0.002). Fasting C-peptide was correlated with the Valsalva ratio (r = 0.24, P = 0.043) and the 30:15 test (r = 0.26, P = 0.023). Further analysis showed that fasting C-peptide (OR: 0.041, 95% CI 0.003–0.501, P = 0.012) and HOMA-B (OR: 0.965, 95% CI 0.934–0.996, P = 0.028) were independently associated with cardiovascular autonomic nerve function in this population. The patients with fasting C-peptide values < 0.67 nmol/L were more likely to have CAN than those with C-peptide levels ≥0.67 nmol/L (OR: 6.00, 95% CI 1.815–19.830, P = 0.003). A high prevalence of CAN was found in patients with newly-diagnosed type 2 diabetes. Decreased β-cell function was closely associated with CAN in this population.