A group of 1196 type 2 (non-insulin-dependent) diabetic patients was followed for a mean of 10 years to determine the incidence of persistent albuminuria, its associated risk factors and prognosis, as well as causes of death in patients. None of the patients studied had albuminuria on entry. The mean annual incidence rate of persistent albuminuria per 1000 person-years in the patients was higher in males than in females (18.42 and 12.57, respectively). Development of persistent albuminuria was associated with age at entry, duration of known diabetes, systolic blood pressure, fasting glucose level, presence of diabetic retinopathy and type of treatment. Among 193 patients who developed persistent albuminuria during the observation period, 66 (34.2%) died before the end of the observation period, with a mean survival period (+/- SD) of 3.0 +/- 3.1 years after the onset of persistent albuminuria, indicating an extremely poor prognosis. Renal disease was the predominant cause of death in patients who developed persistent albuminuria, followed by heart disease and cerebrovascular disease.