Background <p>This study aimed to determine the 5-year incidence of albuminuria in Chinese individuals with newly diagnosed type 2 diabetes mellitus (T2DM) and identify baseline risk factors for progression to albuminuria.</p> Methods <p>An observational cohort study was conducted with 604 individuals aged ≥ 18 years diagnosed with T2DM between January 2014 and December 2017 at a tertiary hospital in China, followed through November 2022. The cumulative incidence of progression from normoalbuminuria to albuminuria was assessed. Risk factors for progression were evaluated using multiple logistic regression.</p> Results <p>Of the 368 individuals with normoalbuminuria at diagnosis, the mean (SD) age was 54 (11) years. The 5-year cumulative incidence of progression to albuminuria was 7.9%. Higher urine albumin-to-creatinine ratio (UACR) (OR 1.18; 95% CI, 1.10–1.26) and higher homeostasis model assessment of insulin resistance (HOMA-IR) (OR 1.18; 95% CI, 1.15–1.32) at diagnosis were independently associated with progression. After adjusting for baseline UACR, higher HOMA-IR at diagnosis was linked to a more rapid increase in UACR over time.</p> Conclusion <p>Early screening for UACR and management of insulin resistance in individuals with T2DM may help delay the onset of microalbuminuria.</p>