Background Urinary angiotensinogen levels are higher in type 2 diabetes patients with nephropathy, a risk factor for developing renal and cardiovascular consequences. However, the potential relationship between serum urine angiotensinogen levels and albuminuria (in terms of its varying concentrations) is not yet established. As a result, we conduct this research. Method Sixty-six adults with type 2 diabetes were split into three groups, each of which included 22 people based on their degree of albuminuria, in addition to an age- and gender-matched control group of 22 healthy volunteers. Routine laboratory tests and urine angiotensinogen were evaluated in the study groups and correlated to other study parameters. Results The current study showed that urine angiotensinogen levels are more significant in diabetic patients with higher albuminuria levels, and it was also found to be associated with urinary albumin excretion in diabetic patients with different grades of albuminuria (n = 66, r = 0.666, p<0.001), and it had highly significant validity in the prediction of albuminuria among individuals with diabetes with sensitivity of 88.6%, specificity of 81.8% and accuracy of 86.4%. Conclusions According to the findings of this study, increased urine angiotensinogen levels were associated with urinary albumin excretion, and elevated urinary angiotensinogen might be utilized as an effective marker for identifying the degree of albuminuria in diabetic individuals.