Background: To examine the association between the degree of risk factor control and cardiovascular disease (CVD) risk in type 2 diabetes and to assess if the presence of cardio-renal disease modifies these relationships. Methods: A retrospective cohort study using data from English practices from CPRD GOLD (Clinical Practice Research Datalink) and the SCI-Diabetes dataset (Scottish Care Information-Diabetes), with linkage to hospital and mortality data. We identified 101 749 with type 2 diabetes (T2D) in CPRD matched with 378 938 controls without diabetes and 330 892 with type 2 diabetes in SCI-Diabetes between 2006 and 2015. The main exposure was number of optimized risk factors: nonsmoker, total cholesterol ≤4 mmol/L, triglycerides ≤1.7 mmol/L, glycated haemoglobin (HbA1c) ≤53 mmol/mol (≤7.0%), systolic blood pressure <140mm Hg, or <130 mm Hg if high risk. Cox models were used to assess cardiovascular risk associated with levels of risk factor control. Results: In CPRD, the mean baseline age in T2D was 63 years and 28% had cardio-renal disease (SCI-Diabetes: 62 years; 35% cardio-renal disease). Over 3 years follow-up (SCI-Diabetes: 6 years), CVD events occurred among 27 900 (27%) CPRD-T2D, 101 362 (31%) SCI-Diabetes-T2D, and 75 520 (19%) CPRD-controls. In CPRD, compared with controls, T2D participants with optimal risk factor control (all risk factors controlled) had a higher risk of CVD events (adjusted hazard ratio, 1.21; 95% confidence interval, 1.12–1.29). In T2D participants from CPRD and SCI-Diabetes, pooled hazard ratios for CVD associated with 5 risk factors being elevated versus optimal risk factor control were 1.09 (95% confidence interval, 1.01–1.17) in people with cardio-renal disease but 1.96 (95% confidence interval, 1.82–2.12) in people without cardio-renal disease. People without cardio-renal disease were younger and more likely to have suboptimal risk factor control but had fewer prescriptions for risk factor modifying medications than those with cardio-renal disease. Conclusions: Optimally managed people with T2D have a 21% higher CVD risk when compared with controls. People with T2D without cardio-renal disease would be predicted to benefit greatly from CVD risk factor intervention.