In 328 type 2 diabetic patients followed for 9.0 years (mean), we investigated whether endothelial dysfunction and chronic inflammation (estimated from plasma markers) can explain the association between (micro)albuminuria and mortality. Of the patients, 113 died. Mortality was increased in patients with baseline microalbuminuria or macroalbuminuria (odds ratios as compared with normoalbuminuria, 1.78 [P < 0.05] and 2.86 [P < 0.01]) and in patients with soluble vascular cell adhesion molecule 1 in the third tertile and C-reactive protein in the second and third tertiles (odds ratios as compared with the first tertile, 2.05 [ P < 0.01], and 1.80 [P < 0.05] and 2.92 [ P < 0.01]). These associations were mutually independent. The mean yearly change in urinary albumin excretion was 9.4%; in von Willebrand factor, 8.1%; in tissue-type plasminogen activator, 2.8%; in soluble vascular cell adhesion molecule 1, 5.2%; in soluble E-selectin, -2.3%; in C-reactive protein, 3.8%; and in fibrinogen, 2.3%. The longitudinal development of urinary albumin excretion was significantly and independently determined by baseline levels of and the longitudinal development of BMI, systolic blood pressure, serum creatinine, glycated hemoglobin and plasma von Willebrand factor (baseline only), soluble E-selectin (baseline only), tissue-type plasminogen activator, C-reactive protein, and fibrinogen. The longitudinal developments of markers of endothelial function and inflammation were interrelated. In type 2 diabetes, increased urinary albumin excretion, endothelial dysfunction, and chronic inflammation are interrelated processes that develop in parallel, progress with time, and are strongly and independently associated with risk of death.