The first sign of diabetic nephropathy is microalbuminuria, but its predictive role of progression to overt nephropathy in type 2 diabetes has not yet been clarified. The aims of this study were to assess during 7 years of follow-up the incidence rate of overt nephropathy and the predictive role of microalbuminuria and other baseline variables (blood pressure, lipids, fibrinogen, uric acid, smoking, and HbA(1c) cumulative average during follow-up).A prospective population-based study was performed in Casale Monferrato, Italy, including 1,253 type 2 diabetic patients recruited at baseline (1991-1992), 765 with normoalbuminuria (albumin excretion rate [AER] <20 microg/min) and 488 with microalbuminuria (AER 20-200 microg/min). All measurements were centralized. A nested case-control study within the cohort was performed, selecting four control subjects, frequency matched for age and attained individual time of follow-up with each case. Conditional regression analysis was performed to assess variables independently associated with risk of progression to overt nephropathy.Of 1,253 total patients, 1,103 (88.0%) were included in the follow-up examination (median 5.33 years); their age and duration of disease at baseline were 68.4 +/- 10.5 years and 10.4 +/- 6.6 years, respectively. Cases of overt nephropathy were 202, giving an incidence rate of 37.0/1,000 person-years (95% CI 32.3-42.6). In conditional logistic regression analyses, microalbuminuria provided a 42% increased risk with respect to normoalbuminuria (95% CI 0.98-2.06), independently of duration of diabetes, hypertension, and systolic blood pressure. Other variables independently associated with progression to overt nephropathy were HbA(1c) cumulative average (P = 0.002), apolipoprotein B (P = 0.013), fibrinogen (P = 0.02), and HDL cholesterol (P = 0.03).Of type 2 diabetic patients, 3.7% progress every year to overt nephropathy. Microalbuminuria is associated with a 42% increased risk of progression to overt nephropathy. Other independent predictors are HbA(1c), HDL cholesterol, apolipoprotein B, and fibrinogen.