OBJECTIVE To determine the incidence of and factors associated with an estimated glomerular filtration rate (eGFR) <60 mL/min/1.73 m2 in people with diabetes. RESEARCH DESIGN AND METHODS We identified people with diabetes in the EXamining ouTcomEs in chroNic Disease in the 45 and Up Study (EXTEND45), a population-based cohort study (2006–2014) that linked the Sax Institute’s 45 and Up Study cohort to community laboratory and administrative data in New South Wales, Australia. The study outcome was the first eGFR measurement <60 mL/min/1.73 m2 recorded during the follow-up period. Participants with eGFR < 60 mL/min/1.73 m2 at baseline were excluded. We used Poisson regression to estimate the incidence of eGFR <60 mL/min/1.73 m2 and multivariable Cox regression to examine factors associated with the study outcome. RESULTS Of 9,313 participants with diabetes, 2,106 (22.6%) developed incident eGFR <60 mL/min/1.73 m2 over a median follow-up time of 5.7 years (interquartile range, 3.0–5.9 years). The eGFR <60 mL/min/1.73 m2 incidence rate per 100 person-years was 6.0 (95% CI 5.7–6.3) overall, 1.5 (1.3–1.9) in participants aged 45–54 years, 3.7 (3.4–4.0) for 55–64 year olds, 7.6 (7.1–8.1) for 65–74 year olds, 15.0 (13.0–16.0) for 75–84 year olds, and 26.0 (22.0–32.0) for those aged 85 years and over. In a fully adjusted multivariable model incidence was independently associated with age (hazard ratio 1.23 per 5-year increase; 95% CI 1.19–1.26), geography (outer regional and remote versus major city: 1.36; 1.17–1.58), obesity (obese class III versus normal: 1.44; 1.16–1.80), and the presence of hypertension (1.52; 1.33–1.73), coronary heart disease (1.13; 1.02–1.24), cancer (1.30; 1.14–1.50), and depression/anxiety (1.14; 1.01–1.27). CONCLUSIONS In participants with diabetes, the incidence of an eGFR <60 mL/min/1.73 m2 was high. Older age, remoteness of residence, and the presence of various comorbid conditions were associated with higher incidence.