Identification of variants predicting development of renal dysfunction would offer substantial clinical benefits. There is evidence that coding non-synonymous variants in the gene encoding paraoxonase 2 (PON2) are associated with nephropathy in both type 1 and type 2 diabetes.We examined the relationship between variation at the C311S and A148G polymorphisms (together with PON2 intronic variant rs12704795) and indices of renal dysfunction (progression to micro- and macroalbuminuria, plasma creatinine increases) in 3,374 newly diagnosed type 2 diabetic subjects from the UK Prospective Diabetes Study followed prospectively (median 14.0 years), using proportional hazards models, adjusted for sex, ethnicity and other known or putative risk factors.rs12704795 genotypes were associated with differing rates of development of microalbuminuria (relative risk [RR] for CC vs AA homozygotes 0.68 [95% CI 0.54-0.87], p=0.002) but not other measures of worsening renal function. Heterozygotes for C311S were more likely to develop microalbuminuria (RR=1.31 [95% CI 1.11-1.54], p=0.001) but less likely to double creatinine levels during follow-up (RR=0.49 [95% CI 0.27-0.89], p=0.02). There was no corroboration of this latter association for related outcomes and no prior evidence supports heterosis effects at this locus.We conclude that the PON2 variants typed in this study have, at best, a small effect on the risk of renal dysfunction in type 2 diabetes.