Obstructive sleep apnea (OSA) is associated with impaired glycemic control and a higher risk of vascular complications, such as diabetic kidney disease (DKD). However, the effect of apnea-hypopnea suppression on DKD progression is unclear. To assess the effect of continuous positive airway pressure (CPAP) on the urinary albumin-to-creatinine ratio (UACR) in patients with DKD and OSA. In a 52-week, multicentric, open-label, parallel, and randomized clinical trial, 185 patients with OSA and DKD were randomized to CPAP and usual care (  = 93) or usual care alone (  = 92). UACR, estimated glomerular filtration rate, serum concentrations of creatinine and glycated hemoglobin, insulin resistance, lipid concentrations, sleepiness, and quality of life. A 52-week change in UACR from baseline did not differ significantly between the CPAP group and the usual-care group. However, in per-protocol analyses that included 125 participants who met prespecified criteria for adherence, CPAP treatment was associated with a great reduction in UACR (mean difference, -10.56% 95% confidence interval, -19.06 to -2.06;  = 0.015). CPAP effect on UACR was higher in nonsleepy patients with more severe OSA, worse renal function, and a more recent diagnosis of DKD. CPAP treatment also improved glycemic control and insulin resistance, as well as sleepiness and health-related quality of life. In patients with OSA and DKD, the prescription of CPAP did not result in a statistically significant reduction in albuminuria. However, good adherence to CPAP treatment in addition to usual care may result in long-term albuminuria reduction compared with usual care alone. Clinical trial registered with www.clinicaltrials.gov (NCT02816762).