Microalbuminuria is a major risk factor for various renal and cardiovascular events. The need for early detection and treatment of patients at risk for microalbuminuria is important to limit the excess renal and cardiovascular disease associated with type 2 diabetes mellitus (T2DM). Therefore, this study aimed to screen newly detected T2DM patients for the presence of microalbuminuria. A total of 120 patients diagnosed with T2DM were included in this prospective observational study. After collecting history, physical examination, and various biochemical investigations such as kidney function test, plasma blood sugars, lipid profile and glycosylated hemoglobin (HbA1c) were conducted. The detection of microalbuminuria was done by Micral test. Data were analyzed by the Chi-square test for significance of qualitative variables. A p-value of < 0.05 was considered significant. Prevalence of microalbuminuria among T2DM patients was observed to be 40%. HbA1c levels of females showed a significant association (p=0.007). Patients with BMI>25 kg/m2 had a significant incidence of microalbuminuria (p<0.001). Urinary glucose was significantly higher (p=0.024) in 83.3% of patients with microalbuminuria. The mean fasting and postprandial blood glucose levels were considerably higher in patients with microalbuminuria (p=0.004, p=0.002). Blood urea and serum creatinine levels, too, were noted to be slightly higher in patients with microalbuminuria (p=018, p=0.001). Prevalence of microalbuminuria was slightly less in newly diagnosed T2DM patients. Early diagnosis and management of microalbuminuria in asymptomatic individuals could help in preventing worsening in renal function and progression of overt diabetic nephropathy.