OBJECTIVETo examine the interactive relationship between diabetic retinopathy (DR) and diabetic nephropathy (DN) in type 2 diabetic patients and to elucidate the role of DR and microalbuminuria on the onset of macroalbuminuria and renal function decline.RESEARCH DESIGN AND METHODSWe explored the effects of DR and microalbuminuria on the progression of DN from normoalbuminuria and low microalbuminuria (<150 mg/gCr) to macroalbuminuria or renal function decline in the Japan Diabetes Complications Study (JDCS), which is a nationwide randomized controlled study of type 2 diabetic patients focusing on lifestyle modification. Patients were divided into four groups according to presence or absence of DR and MA: normoalbuminuria without DR [NA(DR−)] (n = 773), normoalbuminuria with DR [NA(DR+)] (n = 279), microalbuminuria without DR [MA(DR−)] (n = 277), and microalbuminuria with DR [MA(DR+)] (n = 146). Basal urinary albumin-to-creatinine ratio and DR status were determined at baseline and followed for a median of 8.0 years.RESULTSAnnual incidence rates of macroalbuminuria were 1.6/1,000 person-years (9 incidences), 3.9/1,000 person-years (8 incidences), 18.4/1,000 person-years (34 incidences), and 22.1/1,000 person-years (22 incidences) in the four groups, respectively. Multivariate-adjusted hazard ratios of the progression to macroalbuminuria were 2.48 (95% CI 0.94–6.50; P = 0.07), 10.40 (4.91–22.03; P < 0.01), and 11.55 (5.24–25.45; P < 0.01) in NA(DR+), MA(DR−), and MA(DR+), respectively, in comparison with NA(DR−). Decline in estimated glomerular filtration rate (GFR) per year was two to three times faster in MA(DR+) (−1.92 mL/min/1.73 m2/year) than in the other groups.CONCLUSIONSIn normo- and low microalbuminuric Japanese type 2 diabetic patients, presence of microalbuminuria at baseline was associated with higher risk of macroalbuminuria in 8 years. Patients with microalbuminuria and DR showed the fastest GFR decline. Albuminuria and DR should be considered as risk factors of renal prognosis in type 2 diabetic patients. An open sharing of information will benefit both ophthalmologists and diabetologists.