Introduction Diabetic kidney disease (DKD) is a common cause of chronic kidney disease with around 25-40% of patients with diabetes being affected. The course of DKD is variable and estimated glomerular filtration rate (eGFR) and albuminuria, the currently used clinical markers, are not able to accurately predict the individual disease trajectory, in particular in early stages of the disease. The aim of this study was to assess the association of urine levels of selected protein biomarkers with the progression of DKD at an early stage of disease. Methods We measured 22 protein biomarkers using the Mesoscale Discovery platform in 461 urine samples of the PROVALID cohort, an observational study of patients with type 2 diabetes mellitus followed at the primary health care level for a minimum of four years. Odds ratios (OR) were estimated for the effect of marker values above median on fast progression using unadjusted and adjusted logistic regression models. RNA expression at the single cell level in kidney biopsy samples obtained from a cohort of young persons with type 2 diabetes mellitus was in addition determined for markers showing significant associations with disease progression. Results Increased urinary levels of epidermal growth factor (EGF) were linked to lower odds of fast progression (defined as annual eGFR decline greater than 2.58 ml/min per 1.73 m2) with an odds ratio (OR) of 0.60 (95% CI 0.46, 0.78). The association with outcome was even stronger when adjusting for a set of 14 baseline clinical parameters including age, biological sex, eGFR, body mass index, albuminuria, and HbA1c. Elevated urinary levels of fatty acid binding protein 3 (FABP3) and vascular cell adhesion molecule 1 (VCAM1) were each significantly associated with fast progression with an OR of 1.44 (95% CI 1.11, 1.87) and an OR of 1.41 (95% CI 1.08, 1.83), respectively. Enriched expression of EGF and FABP3 was observed in distal convoluted tubular cells and VCAM1 in parietal epithelial cells at single cell level from biopsies of patients with early DKD. Conclusion In summary we show that lower urinary levels of EGF and higher urinary levels of FABP3 and VCAM1 are significantly associated with DKD progression in early-stage disease.