CD163 is a marker for alternatively activated macrophages, which have been implicated in the pathogenesis of lupus nephritis (LN). In our preliminary screening of urine proteins in LN, urine soluble CD163 (sCD163) was significantly elevated in patients with active LN. To evaluate the potential of sCD163 as a biomarker in LN, urine sCD163 was assayed in patients with active LN, active non-renal lupus patients (ANR), inactive SLE and healthy controls (HC), using ELISA and normalized to urine creatinine. The correlation of urine sCD163 with clinical parameters and renal pathological attributes was further investigated in LN patients with concurrent renal biopsies. A total of 228 SLE patients and 56 HC were included from three cohorts. Results demonstrated that urine sCD163 was significantly elevated in active LN when compared with HC, inactive SLE, or ANR in African-American, Caucasian and Asian subjects (all P < 0.001). In LN patients with concurrent renal biopsies, urine sCD163 was significantly increased in patients with proliferative LN when compared with non-proliferative LN (P < 0.001). Urine sCD163 strongly correlated with SLEDAI, rSLEDAI, activity index (AI) of renal pathology, fibrinoid necrosis, cellular crescents, and interstitial inflammation on biopsies (all P < 0.01). Macrophages, particularly M2 macrophages, the predominant cells expressing CD163 within LN kidneys, represented a potential source of elevated urine sCD163, based on single-cell RNA sequencing analysis. To conclude, urine sCD163 discriminated patients with active LN from other SLE patients and was significantly elevated in proliferative LN. It strongly correlated with concurrent AI and several specific pathological attributes, demonstrating its potential in predicting renal pathology.