Aims: To conduct an evidence-based evaluation of diabetic retinopathy (DR) for the diagnosis of diabetic nephropathy (DN) in type 2 diabetics with kidney disease. Methods: We systematically searched PubMed, EMBASE, and the Cochrane Library from inception to June 27, 2018, including the reference lists of identified primary studies. A study was included if it (1) used DR as a diagnostic test for DN; and (2) used histological evaluation of renal tissues as the reference standard. Results: The analysis included 45 studies (4,561 patients). A bivariate analysis yielded a sensitivity of 0.67 (95% CI 0.61–0.74) and a specificity of 0.78 (95% CI 0.73–0.82). The summary receiver operating characteristic curve analysis provided an area under the curve (AUC) of 0.79 (95% CI 0.76–0.83). In a setting of 41% prevalence of DN, the probability of DN would be 68% if the test of DR was positive, and the probability of DN would be 23% if it was negative. In addition, although the mean specificity of proliferative DR for the detection of DN was 0.99 (95% CI 0.45–1.00), the mean sensitivity was 0.34 (95% CI 0.24–0.44), and the AUC was 0.58 (95% CI 0.53–0.62). Conclusions: DR is helpful in diagnosing DN in persons with type 2 diabetes and kidney disease, but the severity of DR may not parallel the presence of DN.