Objectives <p>This study aimed to evaluate the urinary level of soluble CD163 (sCD163) in patients with type 2 diabetes as a potential early indicator of diabetic nephropathy (DN).</p> Methods <p>This cross-sectional study included 60 type 2 diabetic patients and 20 healthy individuals. Patients were divided into three groups according to their albumin/creatinine ratio: normoalbuminuric, microalbuminuric, and macroalbuminuric groups. Urinary levels of sCD163 (usCD163) were measured using ELISA.</p> Results <p>The mean CD163 levels showed a significantly increasing trend from the patients without nephropathy to those with nephropathy. The multivariate logistic regression analysis revealed that CD163 was an independent risk factor for DN progression in patients with DM (<i>p</i> = 0.011). According to the ROC curve, at a cutoff value of CD163 &gt; 510.2 pg/mL, the area under the curve was 0.88 for discriminating diabetic patients with DN from those without.</p> Conclusions <p>sCD163 can be used as a potential marker for prediction of DN in patients with type 2 diabetes.</p>