Several studies have indicated that insulin resistance, elevated blood pressure (BP), and dyslipidemia precede the onset of non-insulin-dependent diabetes mellitus (NIDDM). Little data, however, exist on the presence of renal disease in prediabetic subjects. We measured albumin excretion in a cross-sectional population study in subjects 65–74 years of age living in eastern Finland in relation to the risk of developing diabetes 3.5 years later. The prevalence of microalbuminuria (urinary albumin-to-urinary creatinine ratio ≥ 2 mg/mmol) was 1.3-, 1.8-, and 2.0-fold higher among subjects with impaired glucose tolerance (n = 242), newly diagnosed NIDDM subjects (n = 92), and previously diagnosed NIDDM subjects (n = 136), respectively, compared with subjects with normal glucose tolerance (n = 826). Nondiabetic subjects with microalbuminuria had multiple abnormalities in cardiovascular risk factors including elevated BP, high triglyceride concentration, high insulin concentration, and a low high-density lipoprotein cholesterol concentration, a cluster of risk factors typical for prediabetic individuals. The relationship between microalbuminuria and the incidence of NIDDM over the 3.5-year follow-up was studied in 891 subjects who were free of diabetes at baseline. Converters to diabetes (n = 69) had a higher prevalence of hypertension (68.1 vs. 54.4%, P < 0.05) and a higher prevalence of microalbuminuria (43.5 vs. 30.4%, P < 0.05) than nonconverters (n = 822). In logistic regression analysis, microalbuminuria predicted the development of NIDDM independently of BP level. However, after adjustment for plasma glucose and insulin levels at baseline, the difference in the prevalence of microalbuminuria between converters and nonconverters was not statistically significant. These results suggest that microalbuminuria may be a feature of the prediabetic state and that the increase in albumin excretion rate may be related to increases in glucose and insulin concentrations.