Albuminuria has been considered the golden standard biomarker for diabetic kidney disease (DKD), but appears once significant kidney damage has already occurred. Angiopoietin-2 (Angpt-2) has been implicated in the development and progression of DKD in adults. We aimed to explore the association of serum Angpt-2 levels with DKD in children and adolescents with type 1 diabetes mellitus (T1DM) of short duration (3–5 years) and to evaluate the predictive power of serum Angpt-2 in the early detection of DKD prior to the microalbuminuric phase. The current cross-sectional study included 90 children divided into three age and sex-matched groups based on urinary albumin-to-creatinine ratio (UACR): microalbuminuric diabetic group (n = 30), non-albuminuric diabetic group (n = 30), and control group (n = 30). All participants were subjected to anthropometric measurements, serum Angpt-2 and fasting lipid profile (total cholesterol, triglycerides, LDL-C, HDL-C, and Non-HDL-C) assessment. Glomerular filtration rate was estimated based on serum creatinine (eGFR-Cr). Higher serum Angpt-2 levels were detected in both diabetic groups compared to controls and in microalbuminuric compared to non-albuminuric diabetic group. There was no detected significant difference in eGFR-Cr values across the study groups. Serum Angpt-2 was positively correlated with triglycerides, LDL, Non-HDL-C, HbA1c, and UACR, while UACR, HbA1c, and Non-HDL-C were independent predictors for serum Angpt-2. Serum Angpt-2 at level of 137.4 ng/L could discriminate between microalbuminuric and non-albuminuric diabetic groups with AUC = 0.960 and at level of 115.95 ng/L could discriminate between the non-albuminuric diabetic group and controls with AUC = 0.976.Conclusion: Serum Angpt-2 is a promising potent biomarker for the detection of early stage of DKD in childhood T1DM before albuminuria emerges.What is Known?• Urine albumin-to-creatinine ratio (UACR) and glomerular filtration rate (GFR) are the golden standard but late biomarkers for DKD.• Angiopoietin-2 has been implicated in the development and progression of DKD in adults with diabetes, but has not been explored in T1DM children with DKD.What is New?• Higher serum angiopoietin-2 was detected in diabetic groups compared to controls and in microalbuminuric compared to non-albuminuric group.• Angiopoietin-2 correlated positively with triglycerides, LDL, Non-HDL-C, HbA1c, and UACR.• Serum angiopoietin-2 is a promising early diagnostic biomarker for DKD in children with T1DM.