Background: Diabetic nephropathy (DN) is a leading cause of chronic kidney disease and end-stage renal disease worldwide. Proteinuria is a key marker of kidney damage in diabetic patients, but its prevalence and prognostic implications remain underexplored. Objective: To evaluate the prevalence of proteinuria in diabetic nephropathy patients and assess its prognostic impact on renal function, cardiovascular events, and mortality. Methods: This observational study included 100 diabetic nephropathy patients from a tertiary care center. Clinical data, including demographics, duration of diabetes, comorbidities, and renal function (eGFR), were collected. Proteinuria was categorized as microalbuminuria, macroalbuminuria, or no proteinuria. Renal function, cardiovascular events, and mortality were monitored over a 12-month period. Results: Proteinuria was present in 72% of participants, with 45% showing microalbuminuria and 27% macroalbuminuria. Longer diabetes duration and higher HbA1c levels were significantly associated with proteinuria (p < 0.01). Proteinuria was strongly correlated with renal function decline, with 35% of proteinuric patients showing a decline in eGFR (p < 0.001). Cardiovascular events occurred more frequently in proteinuric patients (40% vs. 15%, p = 0.02), and mortality was higher in this group (10% vs. 3.5%, p = 0.04). Multivariate analysis identified HbA1c >7%, hypertension, and diabetes duration >10 years as independent risk factors for proteinuria. Conclusion: Proteinuria is a prevalent and significant prognostic factor in diabetic nephropathy, associated with faster renal function decline, increased cardiovascular risk, and higher mortality. Early detection and management of proteinuria are crucial for improving outcomes in diabetic nephropathy patients.