Objective To explore the clinical significance of cystatin C in the early diagnosis of type 2 diabetic nephropathy. Methods The serum samples of 133 cases with type 2 diabetes were collected and analyzed. According to the 24-hour urinary albumin excretion rate (UAER), these cases were divided into three groups: Group one (B) was DM group (UAER <30mg/24h), with a total of 58 cases (28 males and 30 females) at an average age of 56.6; Group two (C) was early diabetic nephropathy group (30 mg/24h <300mg/24h) with a total of 41 cases (20 males and 21 females) at an average age of 58.5; Group three (D) was diabetic nephropathy group (UAER> 300mg/24h) with total of 34 cases (17 males and 17 females) at an average age of 63.5; a control group (A) was set up with 50 patients (24 males and 26 females) at average age of 61.8. Tests were done in terms of CysC, serum creatinine (Scr), blood urea nitrogen (BUN) and UAER among four groups, and results were analyzed. Results The levels of CysC, Scr, BUN and UAER in group D were higher than that of group A respectively (P <0.01). The levels of CysC and UAER in group C were higher than that of Group A and B respectively (P <0.05). The level of CysC and UAER in group B were higher than that group A respectively (P <0.05). The levels of Scr and BUN in group C were higher than that of group A and B respectively (P <0.05), whereas there was no significant difference between Group A and B in terms of Scr and BUN (P> 0.05). The level of CysC had good correlation with that of UAER（r=0.656，P＜0.01), but had no correlation with the levels of Scr and BUN. Conclusion As compared with Scr and BUN, the level of CysC rises significantly in the diabetic nephropathy. Therefore, the combination of CysC and UAER can be used as prediction indictors of early diabetic nephropathy.