<b><i>Introduction:</i></b> There is a great clinical need for novel markers to predict kidney function decline in patients with type 2 diabetes. We explored the potential of posttranslationally modified fetuin-A fragments in urine (uPTM-FetA) as such a marker. <b><i>Methods:</i></b> We included patients with type 2 diabetes from two independent, nonoverlapping prospective cohort studies. A cut-off for uPTM-FetA, measured via ELISA method, was determined using the Youden index in the primary cohort of patients with type 2 diabetes from Taiwan. Kidney endpoint was defined as an estimated glomerular filtration rate (eGFR) decline ≥30% from baseline, reaching of an eGFR &lt;15 mL/min/1.73 m², or a need of renal replacement therapy. Prospective associations were assessed in Cox regression models. All analyses were replicated in a cohort of patients with type 2 diabetes from the Netherlands. <b><i>Results:</i></b> In total, 294 patients with type 2 diabetes (age 61 ± 10 years, 55% male, eGFR 88 ± 16 mL/min/1.73 m²) were included in the primary cohort. During a follow-up of median 4.6 years, 42 participants (14%) experienced the kidney endpoint. Using the defined cut-off, a high uPTM-FetA was associated with a higher risk of renal function decline (<i>P</i>_log-rank &lt; 0.0001). This association was similar in subgroups depending on albuminuria. This association remained, independent of age, sex, baseline eGFR, albuminuria, HbA1c, and other potential confounders (HR: 9.94; 95% CI: 2.96–33.40; <i>p</i> &lt; 0.001 in the final model). Analyses in the validation cohort (376 patients with type 2 diabetes, age 64 ± 11 years, 66% male, eGFR 76 ± 24 mL/min/1.73 m²) using the same cut-off yielded similar results. <b><i>Conclusion:</i></b> uPTM-FetA was independently associated with kidney function decline in patients with type 2 diabetes validated in a 2-cohort study. The significant additive predictive power of this biomarker from conventional risk factors suggests its clinical use for renal function progression in patients with type 2 diabetes.