OBJECTIVE: Despite the achievement of blood glucose, blood pressure, and LDL cholesterol (LDL-C) targets, the risk for diabetic kidney disease (DKD) remains high among patients with type 2 diabetes. This observational retrospective study investigated whether diabetic dyslipidemia-that is, high triglyceride (TG) and/or low HDL cholesterol (HDL-C) levels-contributes to this high residual risk for DKD. RESEARCH DESIGN AND METHODS: Among a total of 47,177 patients attending Italian diabetes centers, 15,362 patients with a baseline estimated glomerular filtration rate (eGFR) ≥60 mL/min/1.73 m, normoalbuminuria, and LDL-C ≤130 mg/dL completing a 4-year follow-up were analyzed. The primary outcome was the incidence of DKD, defined as either low eGFR (<60 mL/min/1.73 m) or an eGFR reduction >30% and/or albuminuria. RESULTS: Overall, 12.8% developed low eGFR, 7.6% an eGFR reduction >30%, 23.2% albuminuria, and 4% albuminuria and either eGFR <60 mL/min/1.73 m or an eGFR reduction >30%. TG ≥150 mg/dL increased the risk of low eGFR by 26%, of an eGFR reduction >30% by 29%, of albuminuria by 19%, and of developing one abnormality by 35%. HDL-C <40 mg/dL in men and <50 mg/dL in women were associated with a 27% higher risk of low eGFR and a 28% risk of an eGFR reduction >30%, with a 24% higher risk of developing albuminuria and a 44% risk of developing one abnormality. These associations remained significant when TG and HDL-C concentrations were examined as continuous variables and were only attenuated by multivariate adjustment for numerous confounders. CONCLUSIONS: In a large population of outpatients with diabetes, low HDL-C and high TG levels were independent risk factors for the development of DKD over 4 years.