We aimed to investigate the possible association of the inactive, dephosphorylated, uncarboxylated matrix Gla protein (dp-ucMGP) with oxidized low-density lipoprotein (ox-LDL) and all-cause/cardiovascular (CV) mortality and renal function in diabetic chronic kidney disease (CKD). Ox-LDL and dp-ucMGP were determined in 66 diabetic CKD patients. All patients were prospectively followed for seven years, or until the occurrence of death, or a composite renal outcome of 30% estimated glomerular filtration rate (eGFR) reduction or progression to end-stage renal disease (ESRD) requiring dialysis occurred. Secondary outcomes were the occurrence of CV events. Kaplan–Meier curves showed that patients with plasma dp-ucMGP levels above the median (≥656 pM) had a significantly higher risk for all study endpoints. After adjustment for several well-known cofounders, multivariate Cox analysis showed that high plasma dp-ucMGP levels were associated with all-cause mortality (Hazard ratio-HR = 2.63, 95% Confidence Interval-CI = 1.17–5.94, p = 0.02), CV mortality (HR = 2.82, 95% CI = 1.07–7.49, p = 0.037) and progression of CKD (HR = 4.02, 95% CI = 1.20–13.46, p = 0.024). Circulating dp-ucMGP is associated with mortality and decreased renal function in diabetic CKD.