Objective To investigate the relationship of subclinical hypothyroidism (SCH) with kidney function in patients with type 2 diabetes mellitus (T2DM). Methods A total of 472 hospitalized patients with T2DM receiving serum thyroid function test from January 2008 to December 2012 were subjected in this study. After 38 cases were excluded, the left 434 patients were divided into euthyroid group (n＝371) and SCH group (n＝63) according to serum thyroid function test. Their general condition and clinical data were collected and analyzed. An ordinal logistic regression analysis was conducted to determine the risk factors. Results Compared with the euthyroid group, the percentage of females (63.49%), body mass index [(25.57±3.25)kg/m2], and the prevalence of hypertension (69.84%) and cardiovascular disease (57.14%) were statistically higher in the SCH group (P＜0.05); and so did the glycosylated hemoglobin [HbA1c, (8.94%±1.03%)], serum creatinine [(97.70±20.80)μmol/L], blood urea nitrogen [(8.22±3.64)mmol/L], total cholesterol [(5.83±1.08)mmol/L] and low density lipoprotein cholesterol [(3.86±1.21)mmol/L, all P＜0.05]. Ordinal logistic regression analysis revealed that hypertension, elevated thyroid stimulating hormone and HbA1c were significantly associated with kidney dysfunction in T2DM patients (P＜0.05). Conclusion Besides hypertension and hyperglycemia, SCH is related to the severity of kidney dysfunction in T2DM patients.