Background/Aims: During the first 10 years, two thirds of the patients with type 2 diabetes mellitus (DM) have microalbuminuria (MA). Functional renal reserve (FRR) and its relationship with proteinuria and metabolic control are unknown at the early phases of disease. We investigated the frequency of MA in recently diagnosed type 2 DM patients, and its association with FRR. Methods: We studied 181 type 2 DM patients with less than 6 months since diagnosis. Renal volume, MA, glomerular filtration rate (GFR) and renal plasma flow (ERPF) were evaluated before and after an acute oral protein load in 28 type 2 DM patients (14 with, and 14 without MA), and in 7 healthy subjects. Results: A total of 10.6% of the patients had MA. MA patients had higher cholesterol and triglyceride levels than those normoalbuminuric. Twenty recently diagnosed type 2 diabetic patients showed high basal GFR. Twelve of them had MA and insulin resistance. After the acute oral protein load, the control subjects and the patients without MA increased their GFR and their ERPF. The group with MA did not. Conclusions: Seventy-five percent of the patients were hyperfiltering. Normoalbuminuric patients had larger increase in GFR and ERRPF than MB patients. We conclude that FRR measurement can be an important tool for the diagnosis of latent diabetic nephropathy.