Background: Analysis of retinal microaneurysm turnover (MAT) has been previously shown to contribute to the identification of eyes at risk of developing clinically significant complications associated with diabetic retinopathy (DR). We propose to further characterize MAT as a predictive biomarker of DR progression and development of vision-threatening complications. Methods: 212 individuals with type 2 diabetes (T2D; ETDRS grades 20 and 35) were evaluated annually in a 5-year prospective, longitudinal study, by color fundus photography and optical coherence tomography. Endpoints were diabetic macular edema (DME) or proliferative retinopathy (PDR). MAT analysis included determination of MA formation and disappearance rates, automatically assessed using the RetMarkerDR®. Retinopathy severity progression was evaluated using step increases in ETDRS severity levels. Results: Of the 212 individuals, 172 completed the 5-year follow-up study or developed an endpoint (n = 27). MAT calculated at 1 year showed a significant difference between groups of endpoint developments (p = 0.018), particularly MA disappearance rate (p = 0.007). MAT also showed a significant difference between eyes with different ETDRS severity progression in the 5-year period (p = 0.035). Conclusions: MAT is an indicator of the development of DME and/or PDR as well as of DR severity progression in T2D individuals with mild retinopathy.