Glomerular filtration rate (GFR) is the best overall index of renal function in health and disease. Inulin and 51Cr-EDTA plasma clearances are considered the gold standard methods for estimating GFR. Unfortunately, these methods require specialized technical personnel over a period of several hours and high costs. In clinical practice, serum creatinine is the most widely used index for the noninvasive assessment of GFR. Despite its specificity, serum creatinine demonstrates an inadequate sensitivity, particularly in the early stages of renal impairment. Recently, cystatin C, a low molecular mass plasma protein freely filtered through the glomerulus and almost completely reabsorbed and catabolized by tubular cells, has been proposed as a new and very sensitive serum marker of changes in GFR. This study was designed to test whether serum cystatin C can replace serum creatinine for the early assessment of nephropathy in patients with type 2 diabetes. The study was performed on 52 Caucasian type 2 diabetic patients. Patients with an abnormal albumin excretion rate (AER) were carefully examined to rule out non-diabetic renal diseases by ultrasonography, urine bacteriology, microscopic urine analysis, and kidney biopsy. Serum creatinine, serum cystatin C, AER, serum lipids, and glycosylated hemoglobin (HbA1c) were measured. GFR was estimated by the plasma clearance of 51Cr-EDTA. In addition the Cockcroft and Gault formula (Cockcroft and Gault estimated GFR) was calculated. Cystatin C serum concentration progressively increased as GFR decreased. The overall relationship between the reciprocal cystatin C and GFR was significantly stronger (r = 0.84) than those between serum creatinine and GFR (r = 0.65) and between Cockcroft and Gault estimated GFR and GFR (r = 0.70). As GFR decreased from 120 to 20 mL/min/1.73 m2, cystatin C increased more significantly that serum creatinine, giving a stronger signal in comparison to that of creatinine over the range of the measured GFR. The maximum diagnostic accuracy of serum cystatin C (90%) was significantly better than those of serum creatinine (77%) and Cockcroft and Gault estimated GFR (85%) in discriminating between type 2 diabetic patients with normal GFR (>80 mL/min per 1.73 m2) and those with reduced GFR (<80 mL/min/1.73 m2). In particular, the cystatin C cut-off limit of 0.93 mg/L corresponded to a false-positive rate of 7.7% and to a false-negative rate of 1.9%; the serum creatinine cut-off limit of 87.5 micromol/L corresponded to a false-positive rate of 5.8% and to a false-negative rate of 17.0%. Cystatin C may be considered as an alternative and more accurate serum marker than serum creatinine or the Cockcroft and Gault estimated GFR in discriminating type 2 diabetic patients with reduced GFR from those with normal GFR.