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The aim of this study was to evaluate the development of renal dysfunction in veterans with type 2 diabetes mellitus (T2DM) treated with different antidiabetic regimens.A retrospective cohort study involving 1715 patients with T2DM and baseline serum creatinine (SCr) of 1.5 mg/dL or lesser. The development of renal dysfunction, defined as 0.5 mg/dL or greater increase from baseline SCr during 4.8 years of follow-up with monotherapy metformin (M), 2 combination therapy groups: metformin + insulin (MI) and metformin + sulfonylurea (MS) users were compared with changes observed in sulfonylurea monotherapy users (S).Both MI and MS groups had higher mean baseline hemoglobin A1C (HbA1C) (9.0 and 8.6%, respectively) and higher rates of baseline macroalbuminuria (17.3 and 12.1%, respectively) as compared with M and S groups (mean HbA1C7.7% in both groups, and proteinuria M-5.1% and S-7.4%). In unadjusted analysis, the development of renal dysfunction was more frequent in MI and MS but not in M group as compared with sulfonylurea monotherapy (unadjusted HRs and [95% confidence interval (CI), 2.1[1.4–3.0], 1.4[1.1–1.9], and 1.0[0.6–1.7], respectively). However, differences in the development of renal dysfunction were not significant between the 4 groups after adjusting for baseline variables. Baseline macroalbuminuria was a strong predictor of Scr elevation of 0.5 mg/dL or greater during follow-up (adjusted HR, 3.1[1.9–4.7]). Unexpectedly, baseline use of renin-angiotensin-aldosterone system blockers was also associated with the development of renal dysfunction (adjusted HR, 1.9[1.3–2.8]).In this retrospective cohort study involving US predominantly male veterans with T2DM, baseline macroalbuminuria and use of RAAS blockers were associated with increased risk of development of renal dysfunction, whereas different antidiabetic regimens were not.