Introduction: Diabetes is a common endocrine disorder, widely prevalent in most of the developing and developed nations. Diabetes Mellitus is characterised by increased blood glucose levels (hyperglycemia), is a silent killer and it kills 10 years before our time as per the study conducted by Oxford University. Uncontrolled Diabetes leads to development of macrovascular and microvascular complications. Diabetic nephropathy is the leading microvascular complication affecting the diabetic subjects, leading to end stage renal disease. Objectives of the study: To evaluate early morning spot urine microalbumin levels in subjects with type 2 diabetes and to evaluate renal function tests like blood urea and serum creatinine levels in subjects with type 2 diabetes. Materials and Methods: Early morning mid-stream urine sample was collected and used for urine microalbumin estimation and the same sample was used for urine microscopy to exclude patients with urinary tract infection. Fasting overnight blood sample was collected into EDTA and fluoride tubes to measure HbA1c and Fasting Blood Glucose respectively. HbA1c was measured by HPLC method. Statistical Analysis: The data was expressed in terms of mean and standard deviation. Results: A total of 120 subjects were enrolled in the study, 60 type 2 diabetic subjects and 60 healthy controls. Out of 60 cases, 34 were males and 26 were females. Among 60 controls 32 were males and 28 were females. The mean and SD of fasting blood glucose, post-prandial blood glucose, glycated hemoglobin levels were elevated in type 2 diabetic subjects as compared to healthy controls. All the type 2 diabetes subjects were evaluated for urine spot microalbumin, which revealed that the prevalence of microalbuminuria was 36.6%. Conclusion: Our study recommends that since 2 DM patients have a considerable risk factor for developing renal impairment, they should be regularly monitored for more sensitive biomarkers of nephropathy such as microalbuminuria and HbA1c levels to facilitate early detection of diabetes-induced nephropathy. Many studies have confirmed that an angiotensin-converting enzyme inhibitor (ACEI) or angiotensin receptor blocker (ARB) can retard the progression of albumin excretion.