Background: Sclerostin, a soluble canonical Wingless integration site signaling inhibitor, is formed by osteocytes and is vital for bone physiology. This work aimed to appraise the role of sclerostin level in early detection of renal osteodystrophy in patients with type 2 diabetes mellitus (T2DM). Methods: This cross-sectional study was done on 75 diabetic patients with different stages of chronic kidney disease (CKD) in the Internal Medicine department, Zagazig University hospital. The patients are classified into 3 groups according to glomerular filtration rate (GFR), group 1(stage 1,2 CKD), group 2(stage 3 CKD), group 3(stage 4,5 CKD). The patients underwent history taking, examination and laboratory studies including routine investigations and assessment of serum sclerostin. Results: The mean age of the patients was 51.07 ± 4.40 years. Males represented 61.3% of them. Mean Sclerostin of them was 5.42 ± 4.53 ng/ml. There are significant differences between groups with different CKD stages regarding sclerostin, hemoglobin, serum creatinine, blood urea, eGFR, phosphorus and parathyroid hormone. There is significant positive correlation between serum sclerostin and all of serum creatinine, blood urea, phosphorus and parathyroid hormone. There is significant negative correlation between it and eGFR. On multivariate regression analysis, it was found that age, serum creatinine, blood urea, eGFR and albumin/creatinine ratio (ACR) significantly associated with serum level. Conclusion: Sclerostin level is negatively correlated with eGFR in diabetic patients with impaired renal function. Serum sclerostin levels increase in diabetic patients starting from CKD-G3 stage. Age, serum creatinine, blood urea, eGFR and albumin/creatinine ratio (ACR) significantly associated with its level.