Sleep disturbances have been shown to be associated with adverse health outcomes including diabetes mellitus (DM), hypertension, and obesity. However, little is known about the relationship between sleep duration and diabetes complications. The present cross-sectional study aimed to examine the association between sleep duration and nephropathy in a population of type 2 DM patients. Diabetic patients aged ≥ 18 years who visited two outpatient clinics in Kermanshah from February 2014 to February 2015 entered the study. Demographic, anthropometric, and biochemical data, as well as information on sleep duration of participants within the past 4 weeks, were collected by an interviewer. Patients with estimated glomerular filtration rate (eGFR) ≤ 60 ml/24 h were excluded from the study. Proteinuria was defined as excretion of more than 150 mg protein in 24-h urine. Differences in urine protein and related variables were examined between four sleep duration groups (≤ 5, 6, 7, and ≥ 8 h). Linear and logistic regression analyses were employed to assess the association between sleep duration and diabetic nephropathy. Four hundred thirty-two patients (63.8% female) with a mean age of 54.68 ± 9.98 years were analyzed. There were statistically significant differences in age, body mass index, waist circumference, DM duration, HbA1C, total cholesterol, HDL cholesterol, triglyceride, uric acid, and urine protein between sleep duration groups. While adjusted linear regression showed no association between sleep duration and urine protein (p = 0.300), multivariable logistic regression revealed male gender, increased HbA1C, shorter sleep duration, increased DM duration, lower eGFR, higher DBP, decreased HDL-C, and higher uric acid levels to be statistically associated with proteinuria. Short sleep duration is adversely associated with proteinuria in type 2 DM patients with normal and near-normal kidney function.