Objective: Though the C-peptide index (CPI) has been a reliable marker for estimation of the beta-cell reserve, its association with microvascular complications in Type 2 diabetes mellitus (DM) patients has not been elucidated as yet. This study, therefore, aimed to investigate the relationship between C-peptide levels and CPI with microvascular complications in Type 2 DM patients. Material and Methods: Type 2 DM patients, over 18 years of age, whose C-peptide levels were analyzed in the endocrinology and internal medicine clinics between 2014 and 2018, having normal kidney functions (glomerular filtration rate >60 mL/min) and who are not dependent on any insulin secretagogue oral antidiabetic agent (i.e., sulfonylurea) were enrolled the study. Blood samples were collected after at least 12 h of fasting, without any drug or insulin administration. Hemogram, hemoglobin A1c (HbA1c), lipid, glucose, C-peptide parameters were analyzed from the same serum sample. The patients were classified into three groups according to the spot urine albumin/ creatinine ratio. Patients with no proteinuria, patients with microalbuminuria, and patients with macroalbuminuria were defined as group 1, group 2, and group 3, respectively. Results: A statistically significant difference between CPI levels in the groups was observed (p<0.001). CPI levels of Groups 2 and 3 were lower than that of group 1 (p=0.007 and p<0.001). In addition, the CPI level of group 3 was significantly lower than that of group 2 (p=0.015). An inverse association between CPI level and proteinuria was thus recognized. HbA1c and proteinuria were found to be positively correlated (p<0.001). Conclusion: This study highlights the association between C-peptide, CPI, and diabetic nephropathy in Type 2 DM patients.