Purpose <p>Podocalyxin is a urinary protein that may serve as a potential indicator for the early detection of diabetic nephropathy. The objectives of this study were to assess urinary podocalyxin levels in patients with and without type 2 diabetic nephropathy and to determine its correlation with renal function.</p> Materials and methods <p>This cross-sectional analytical study was conducted at a tertiary care teaching hospital in south India for 18 months. Study subjects were divided into four groups: non-diabetics, diabetics without albuminuria, diabetics with microalbuminuria, and diabetics with macroalbuminuria. Urinary albumin was detected by the dipstick method in a spot urine sample for all study subjects. Urinary albumin was quantified by nephelometry. The enzyme-linked immunosorbent assay (ELISA) technique estimated urinary podocalyxin levels in all groups.</p> Results <p>Urinary podocalyxin levels were elevated in diabetic subjects compared to the control group. There was a positive correlation between urinary podocalyxin and urine albumin-creatinine ratio (UACR) in diabetic study subjects. No correlation was found between urinary podocalyxin and estimated glomerular filtration rate (eGFR). Urinary podocalyxin showed a sensitivity of 85% and specificity of 64% (at a cut-off value of 275.56 ng/mL) in estimating albuminuria in diabetic subjects. Urinary podocalyxin showed a sensitivity of 89% and specificity of 78% (at a cut-off value of 273.38 ng/mL) in estimating eGFR in diabetic subjects.</p> Conclusion <p>Urinary podocalyxin levels were elevated in patients with type 2 diabetic nephropathy. It was positively correlated with the urine albumin-creatinine ratio in diabetic subjects. However, there was no correlation with the estimated glomerular filtration rate.</p>