Objective: Reduced renal function and albuminuria predict cardiovascular (CV) events and mortality in type 2 diabetes (T2D). In addition, we evaluated the role of co-existing congestive heart failure (CHF) and other CV risk factors on CV events in a large observational population-based cohort of T2D patients. Research design and methods: We included 66,065 patients with T2D who were reported to the National Diabetes Register (NDR) in Sweden between 2003–2006 with a follow-up of 5.7 years. Data on outcomes were collected from the cause of death and hospital discharge registers. Results: A total of 10% of patients experienced a CV event and 3.7% of these were fatal. Increasing levels of albuminuria and renal impairment were independently associated with increasing risk of CV events and all-cause mortality also when adjusting for CHF. In normoalbuminuric patients, a reduction in renal function is an important predictor of CV events and all-cause mortality. Glycaemic control (high HbA1c), smoking and hyperlipidaemia had important effects on risk for CV events in patients with albuminuria, while high blood pressure, but not glycaemic control, had an effect in patients with normoalbuminuric renal impairment. Conclusion: Albuminuria and renal impairment are independent risk factors for CV outcomes and mortality in T2D, albuminuria being the strongest risk factor and relevant at all levels of renal function. In normoalbuminuric patients, a reduction in renal function is an important predictor of CV events and all-cause mortality.