To evaluate the incidence rate of Chronic Kidney Disease (CKD) stage 3-5 (persistent decreased kidney function under 60 mL/min per 1.73 m2) among patients with type 2 diabetes over five years, to identify the risk factors associated with CKD, and develop a risk table to predict five-year CKD stage 3-5 risk stratification for clinical use. The MADIABETES Study is a prospective cohort study of 3,443 outpatients with type 2 diabetes mellitus, sampled from 56 primary health care centers (131 general practitioners) in Madrid (Spain). The cumulative incidence of CKD stage 3-5 at five-years was 10.23% (95% CI = 9.12-11.44) and the incidence density was 2.07 (95% CI = 1.83-2.33) cases per 1,000 patient-months or 2.48 (95% CI = 2.19-2.79) cases per 100 patient-years. The highest hazard ratio (HR) for developing CKD stage 3-5 was albuminuria ≥ 300 mg/g (HR = 4.57; 95% CI= 2.46-8.48). Furthermore, other variables with a high HR were age over 74 years (HR = 3.20; 95% CI = 2.13-4.81), a history of Hypertension (HR = 2.02; 95% CI = 1.42-2.89), Myocardial Infarction (HR= 1.72; 95% IC= 1.25-2.37), Dyslipidemia (HR = 1.68; 95% CI 1.30-2.17), duration of diabetes mellitus ≥ 10 years (HR = 1.46; 95% CI = 1.14-1.88) and Systolic Blood Pressure >149 mmHg (HR = 1.52; 95% CI = 1.02-2.24). After a five-year follow-up, the cumulative incidence of CKD is concordant with rates described in Spain and other countries. Albuminuria ≥ 300 mg/g and age over 74 years were the risk factors more strongly associated with developing CKD (Stage 3-5). Blood Pressure, lipid and albuminuria control could reduce CKD incidence of CKD in patients with T2DM.