The relationship between coffee consumption and diabetes-related vascular complications remains unclear. To eliminate confounding by smoking, this study assessed the relationships of coffee consumption with major cardiovascular disease (CVD) and microvascular disease (MVD) in never-smokers with type 2 diabetes mellitus (T2DM). Included were 9964 never-smokers with T2DM from the UK Biobank without known CVD or cancer at baseline (7781 were free of MVD). Participants were categorized into four groups according to daily coffee consumption (0, 0.5–1, 2–4, ≥5 cups/day). CVD included coronary heart disease (CHD), myocardial infarction (MI), stroke, and heart failure (HF). MVD included retinopathy, peripheral neuropathy, and chronic kidney disease (CKD). Cox regression models were used to estimate hazard ratios (HRs) and 95% confidential intervals (CIs) of total CVD and MVD and the component outcomes associated with coffee consumption. During a median of 12.7 years of follow-up, 1860 cases of CVD and 1403 cases of MVD were identified. Coffee intake was nonlinearly and inversely associated with CVD (P-nonlinearity = 0.023) and the component outcomes. Compared with no coffee intake, HRs (95% CIs) associated with a coffee intake of 2 to 4 cups/day were 0.82 (0.73, 0.93) for CVD, 0.84 (0.73, 0.97) for CHD, 0.73 (0.57, 0.92) for MI, 0.76 (0.57, 1.02) for stroke, and 0.68 (0.55, 0.85) for HF. Higher coffee intake (≥5 cups/day) was not significantly associated with CVD outcomes. Coffee intake was linearly and inversely associated with risk of CKD (HR for ≥5 vs. 0 cups/day = 0.64; 95% CI: 0.45, 0.91; P-trend = 0.0029) but was not associated with retinopathy or peripheral neuropathy. Among never-smoking individuals with T2DM, moderate coffee consumption (2–4 cups/day) was associated with a lower risk of various CVD outcomes and CKD, with no adverse associations for higher consumption.