This study investigates the association between serum cystatin C, serum creatinine concentrations, N-acetyl-beta-D-glucosaminidase (NAG enzymuria), urine alpha1-microglobulin (alpha1-MG) and beta2-microglobulin (beta2-MG) levels in subjects with type 2 diabetes (n=40, 20M/20F, age range 25-65 years; duration of diabetes 8-10 years) and age- and gender-matched healthy controls (n= 20). Exclusion criteria were absence of gross proteinuria, hypertension, dyslipidaemia or cardiovascular disease. Fasting blood samples and mid-stream specimen of urine (MSSU) were collected and serum creatinine, cystatin C, urine creatinine, NAG enzymuria, alpha1-MG and beta2-MG were measured. Diabetic subjects were separated into two groups based on albumin:creatinine concentration ratio. Group A: <3.5 (mg/mmol creatinine), group B: 3.5-35 (mg/mmol creatinine). While serum creatinine concentrations remained within the laboratory reference range for all groups, serum cystatin C concentration (mg/L) was significantly increased in group B (1.79 +/- 0.42 [mean +/- SD] compared to both control [0.81 +/- 0.10] and group A values [0.95 +/- 0.10]; both P<0.001). NAG enzymuria (units/mmol creatinine) was increased in both diabetic groups compared to control values (group B: 122 +/- 7, group A: 70 +/- 5, controls 27 +/- 2, all P<0.001). alpha1-microglobulin (microg/mmol creatinine) concentrations, similar in both the control group and group A diabetics at 1.10 +/- 0.10 and 1.11 +/- 0.21, respectively, were significantly elevated in group B at 2.10 +/- 0.41 (both P<0.01). Similarly, elevated beta2-MG (microg/mmol creatinine) levels were also observed in group B compared to both group A and control values (3.20 +/- 0.21 vs. 1.80 +/- 0.51 and 0.91 +/- 0.11, respectively; both P<0.001). In addition, group B levels were significantly higher than group A (P<0.001). These observations suggest that serum cystatin C is a more appropriate and effective biomarker for the overall estimation of GFR than serum creatinine values. In addition, increased serum cystatin C values were also associated with early renal tubular insult in subjects with type 2 diabetes, as characterised by increased NAG enzymuria, alpha1- and beta2-microglobulin excretion.