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Introduction This study aims to investigate the association between change in urine albumin-to-creatinine ratio (UACR) and clinical outcomes in patients with chronic kidney disease (CKD) and type 2 diabetes.Research design and methods Adult patients with elevated UACR (≥30 mg/g in initial testing) after the diagnosis of type 2 diabetes and CKD were identified from the Optum electronic health records database (01/2007–09/2021). UACR change from initial to last test (6–24 months) was categorized as >30% decrease, stable (−30% to 30%), or >30% increase. Risk of all-cause mortality, composite cardiovascular (CV) outcome (CV death, myocardial infarction, stroke, and hospitalization for heart failure), and CKD progression (≥40% decline in estimated glomerular filtration rate or kidney failure) were estimated with Cox proportional hazard models adjusted for baseline characteristics.Results Compared with patients with a stable UACR (n=35 117), those with a >30% UACR decrease (n=89 562) had lower risk of all-cause mortality (adjusted HR (aHR)=0.93, 95% CI 0.90 to 0.96), composite CV outcomes (aHR=0.93, 95% CI 0.90 to 0.95), and CKD progression (aHR=0.84, 95% CI 0.81 to 0.86) (all p<0.001), and patients with a >30% UACR increase (n=35 703) had higher risk of each endpoint (aHR=1.24, 95% CI 1.19 to 1.28; aHR=1.24, 95% CI 1.20 to 1.28; and aHR=1.41, 95% CI 1.36 to 1.46, respectively; all p<0.001).Conclusions In patients with CKD and type 2 diabetes, a >30% UACR decrease was associated with lower risk of mortality, CV events, and CKD progression, whereas a >30% UACR increase was associated with higher risk of these clinical outcomes. These findings highlight the importance of albuminuria monitoring and potential clinical benefits of targeted UACR reductions in this population.