To explore the associations of urinary retinol binding protein (RBP) and β-microglobulin (β-MG) with urinary albumin to creatinine ratio (UACR) and renal function in hospitalized patients with type 2 diabetes mellitus (T2DM). A total of 1 030 Chinese patients with T2DM were included in this study. The subjects were divided into the UACR normal group (300 mg/g). Patients with normal UACR were further divided into two groups according to the estimated glomerular filtration rate (eGFR): the eGFR low group (0.7 mg/L) and β-MG (>370 μg/L) in these groups were 3.8%, 8.5%, 39.0% (<0.001), and 12.9%, 26.7%, 46.8% (<0.001), respectively. In the UACR normal group (=788), 12.2% of the patients were with eGFR370 μg/L) was higher in the eGFR low group than that in the eGFR normal group (29.2% vs. 10.7%, <0.001). Multivariate linear stepwise regression analyses were performed using natural logarithm of urine RBP or β-MG as dependent variable, and showed that urine RBP was independently associated with UACR (=0.0005, <0.001), serum creatinine (=0.006, <0.001) and glycosylated hemoglobin A1c (=0.050, =0.001), and β-MG was independently correlated with UACR (=0.000 4, <0.001), serum creatinine (=0.011, <0.001), systolic blood pressure (=0.005, =0.031) and fasting blood-glucose (=0.027, =0.046). Urine RBP and β-MG are positively associated with high UACR and impaired renal function in T2DM patients, and these changes could occur before UACR and eGFR turned out to be abnormal. It is recommended that urine RBP and β-MG be detected as early as possible to identify diabetic kidney disease in patients with normal UACR and eGFR.