Aim: The aim of this study was to clarify the rates of remission and progression for microalbuminuria in patients with type 2 diabetes (T2DM); and factors associated with remission and progression of diabetic nephropathy (DN). Patients and Methods: T2DM patients with a urinary albumin excretion (UAE) rate of 30-300 mg/gCr who were attending the medical clinic in the Tsugaru region in Japan were enrolled into this prospective, observational study for 36 months (N= 317). We investigated the rate of remission (UAE= 300 mg/gCr; overt proteinuria) 36 months after study registration. Results: The number of patients whose UAE levels were= 300 mg/gCr (DN progression) at 36 months after registration was 32 (13.7%). From multiple logistic regression analysis, the sole factor that contributed to remission at 36 months after registration was the UAE levels at registration (OR: 0.99; 95% CI: 0.98-1.00, p=0.003), and the factors that contributed to progression at 36 months after registration were the levels of UAE (OR: 1.01; 95% CI: 1.01-1.02, p=0.000) and systolic blood pressure (OR: 0.96; 95% CI: 0.93-1.00, p=0.033) at registration. Conclusion: Results suggest that patients with less severe microalbuminuria among microalbuminuric patients might more commonly experience DN remission and that earlier intervention is very important for promoting microalbuminuria remission in DN.