The aim of this study is to investigate the association between serum albumin concentrations and nerve conduction (NC) parameters in Chinese patients with type 2 diabetes (T2DM). A total of 409 T2DM patients were enrolled between October 2010 and April 2014. All participants underwent nerve conduction studies. The composite Z scores for NC parameters including conduction velocity (CV), amplitude, and latency were calculated as well. Serum albumin was measured by Bromcresol Green dye-binding method. The composite Z scores of CV and amplitude increased with the increasing albumin tertiles (test for trend, both P < 0.001), while the composite Z score of latency decreased with increasing albumin tertiles (test for trend, P < 0.001). After adjusting for age, sex, duration, and HbA1c, higher serum albumin concentrations were associated with higher composite Z scores of CV (β = 0.314, P < 0.001), amplitude (β = 0.279, P < 0.001), and lower composite Z score of latency (β = -0.279, P < 0.001). When participants were stratified into albuminuria and normoalbuminuria group, we found the associations of serum albumin with composite Z scores of NC parameters remained significant only in the albuminuria group (CV Z score: β = 0.253, P = 0.002; amplitude Z score: β = 0.233, P = 0.006; latency Z score: β = -0.217 P = 0.013) after further adjustment for urinary albumin to creatinine ratio. The optimal cutoff point of serum albumin to indicate abnormal peripheral nerve function was 36.75 g/L in T2DM patients with albuminuria, with a sensitivity of 65.6 % and a specificity of 78.0 %. Serum albumin was independently associated with peripheral nerve function in T2DM patients, especially in those with albuminuria. Serum albumin could be a potential biomarker for diabetic peripheral neuropathy.