Background: Diabetic nephropathy (DN) is a leading cause of chronic kidney disease (CKD) and end-stage renal disease (ESRD), necessitating effective therapeutic interventions. Sodium glucose cotransporter-2 (SGLT2) inhibitors and angiotensin-converting enzyme (ACE) inhibitors are commonly prescribed in DN management, but their comparative renal and cardiovascular benefits remain under evaluation. Aim: This study aims to compare the effectiveness of SGLT2 inhibitors versus ACE inhibitors in reducing albuminuria, preserving renal function, and improving cardiovascular and metabolic outcomes in patients with DN. Methods: A retrospective cohort study was conducted on 300 patients with type 2 diabetes and DN (stages 1-3) at Khyber Teaching Hospital, Peshawar. Patients were categorized into two groups: those receiving SGLT2 inhibitors (n=150) and those on ACE inhibitors (n=150). Key outcome measures included changes in urinary albumin-to-creatinine ratio (UACR), estimated glomerular filtration rate (eGFR), blood pressure, cardiovascular events, and random blood sugar (RBS) levels over a 12-month follow-up period. Results: The SGLT2 inhibitor group demonstrated a significantly greater reduction in UACR ( 120 ± 25.4 mg/g vs. -90 ± 22.1 mg/g, p<0.001) and a slower decline in eGFR (-2.5 ± 1.8 vs. 4.2 ± 2.1 mL/min/1.73m², p<0.01), indicating superior renoprotective effects. Cardiovascular event rates were lower in the SGLT2 group (12% vs. 18%, p<0.05). Additionally, SGLT2 inhibitors resulted in better blood pressure control, with greater reductions in systolic (-130 ± 8.4 mmHg vs. -135 ± 9.2 mmHg, p<0.01) and diastolic (-80 ± 6.1 mmHg vs. -82 ± 5.8 mmHg, p<0.05) blood pressure. SGLT2 inhibitors also provided superior glycemic control, reflected by a greater decrease in RBS levels (-45 ± 10.2 mg/dL vs. -20 ± 8.4 mg/dL, p<0.001). Conclusion: SGLT2 inhibitors demonstrated greater renoprotective, cardiovascular, and glycemic benefits compared to ACE inhibitors in DN patients, supporting their preferential use in DN management. Further prospective studies are warranted to confirm these findings and optimize treatment strategies.