Diabetic nephropathy (DN) is a major complication of type 2 diabetes mellitus (T2DM) and a leading cause of end-stage renal disease. Recent evidence suggests that vitamin D deficiency may play a significant role in the progression of DN by influencing various metabolic and inflammatory pathways. This study aimed to assess the relationship between serum vitamin D levels and the risk of DN in patients with T2DM. A cross-sectional study was conducted on 200 T2DM patients, grouped based on their vitamin D levels: deficient, insufficient, and sufficient. Serum creatinine, estimated glomerular filtration rate (eGFR), and urinary albumin-to-creatinine ratio (UACR) were evaluated as markers of renal function. The results demonstrated that patients with vitamin D deficiency had significantly higher UACR and lower eGFR compared to those with sufficient levels (p < 0.001), indicating an accelerated progression of nephropathy. Multivariate analysis confirmed that vitamin D deficiency was an independent risk factor for DN after adjusting for confounding variables such as age, glycemic control, and blood pressure. These findings suggest that addressing vitamin D deficiency in T2DM patients could mitigate the risk of developing DN and slow its progression. Further interventional studies are warranted to evaluate the therapeutic potential of vitamin D supplementation in this high-risk population.