Objective Angiotensin-converting enzyme2 (ACE2) plays a role in glucose metabolism and renal function. We investigated whether urinary ACE2 levels are associated with abnormal glucose homeostasis and microalbuminuria. Methods For the measurement of urinary ACE2 concentrations, we developed an enzyme-linked immunosorbent assay (ELISA). Using this assay, we assessed urinary ACE2 levels in 621 subjects with normal glucose tolerance (NGT; n = 77); impaired fasting glucose (IFG) or impaired glucose tolerance (IGT) (n = 132); and type 2 diabetes mellitus (T2DM, n = 412). Urinary albumin-to-creatinine ratio (ACR) was used as a measure of urinary albumin excretion. Results Urinary ACE2 levels were significantly higher in subjects with IFG or IGT and T2DM than in the NGT group (P < 0.001). Urinary ACE2 concentrations appeared to correlate with fasting blood glucose, triglyceride, homeostasis model assessment for insulin resistance (HOMA-IR), high sensitivity C-reactive protein (hsCRP), serum creatinine, urinary ACR and estimated glomerular filtration rate, and systolic blood pressure (all P < 0.05). Subjects in the higher urinary ACE2 tertiles also exhibited higher values for systolic blood pressure, fasting blood glucose, HbA1c, triglyceride, HOMA-IR, hsCRP, serum creatinine, and urinary ACR levels. Urinary ACE2 concentration was associated with a higher risk for both T2DM and microalbuminuria after adjusting for clinical risk factors (OR 1.80, 95% CI 1.05-3.08, P = 0.02 for T2DM; OR 2.68, 95% CI 1.55-4.64, P < 0.001 for microalbuminuria). Conclusion Our data suggest that the urinary ACE2 level is closely associated with T2DM and is an independent risk factor for microalbuminuria.