Diabetic nephropathy represents one of the main long-term complications in T2DM patients. Cigarette smoking represents one of modifiable renal risk factors to kidney damage due to lead (Pb) exposure in these patients. Our goal is to investigate serum copeptin and Kidney injury molecule-1 (KIM-1) and urinary lead (UPb) in type 2 diabetes mellitus (T2DM) patients even smokers and non-smokers groups and compared to corresponding health controls and assess its associations with Angiotensin-Converting enzyme Insertion/Deletion polymorphism [ACE (I/D)] polymorphism in diabetic nephropathy progression in those patients. In present study, 106 T2DM patients and 102 healthy control individuals were enrolled. Serum glucose, copeptin, KIM-1, total cholesterol (TChol), triglycerides (TG), estimated glomerular filtration rate (eGFR) and UPb levels and ACE (I/D) polymorphisms were assessed in both groups. Results mentioned to significant variations in all parameters compared to in T2DM group compared to control group. Serum copeptin and UPb demonstrated significant difference in diabetic smokers (DS) and diabetic non-smokers (DNS) groups while KIM-1 exhibited significant change between DNS and healthy control non-smokers (CNS) groups. Positive relation was recorded between serum glucose and KIM-1 while negative one was found between serum copeptin and TChol. D allele was associated with significant variation in most parameters in T2DM, especially insertion/deletion (ID) polymorphism. ROC curve analysis (AUC) for serum copeptin was 0.8, p < 0.044 and for Kim-1 was 0.54, p = 0.13 while for uPb was 0.71, p < 0.033. Serum copeptin and UPb might be a prognostic biomarker for renal function decline in smoker T2DM patients while KIM-1 was potent marker in non-smoker T2DM with association with D allele of ACE I/D gene polymorphism.