Diabetic nephropathy is the consequence of diabetes mellitus (DM) and it is characterized by continuous albuminuria. The aim of the study was to investigate and correlate the lipid profile abnormalities in different stages of albuminuria to understand the checkpoint before progression to end stage renal disease (ESRD). A total of 154 type 2 diabetic patients were included in the study. Urine samples of all patients were subject to biochemical analysis and divided into diabetes with normoalbuminuria (n=52), diabetes with microalbuminuria (n=51), and diabetes with overt proteinuria (n=51) groups, depending upon urinary albumin creatinine ratio (ACR) of <30mg, 30-300 mg, and >300 mg/24 hours respectively. Statistical analysis was done by using One Way ANOVA and Pearson’s correlation coefficient. All lipid profile parameters, such as total cholesterol (TC), triglycerides (Tg), low density lipoprotein cholestero(LDL-C), very low density lipoprotein cholestero (VLDL-C) mean values except high density lipoprotein cholesterol (HDL-C) were increased in all the three groups i.e. diabetes with normoalbuminuria, diabetes with microalbuminuria, diabetes with overt proteinuria, were significantly increased at P<0.005 and found to be in positive correlation with ACR. From the present study it is evident that glucose levels, lipid profile and early proteinuria should be controlled so that further complications could be restricted. Importantly, a correlated lipid profile and albuminuria should be considered as alarming signal, so that by using therapeutic strategies, factors which are responsible for worsening the condition and dragging the disease towards cardiovascular disease (CVD) and ESRD could be properly managed. Therefore, detection of dyslipidemia with a corresponding microalbuminuria in the beginning of DM and accordingly therapeutic intervention could control the resulting cardiovascular or renal complications.