Introduction Patients with type 2 diabetes (T2D) have an increased risk of worsening kidney function (WKF) over time compared with patients without diabetes. Data evaluating the inter-relation between WKF, cardiovascular risk, and clinical events are scarce. We aim to study the association of WKF with subsequent cardiovascular events and the probabilities of transition from WKF to hospitalization or death according to patients’ risk. We have used a large population of patients with T2D and a high cardiovascular risk enrolled in the Action to Control Cardiovascular Risk in Diabetes Study. Research design and methods Time-updated, joint, and multistate modeling were used. WKF was defined as an estimated glomerular filtration rate (eGFR) decline greater than 40% from baseline. A total of 10 251 patients were included, of whom 1213 (11.8%) presented WKF over a median (percentile 25–75 ) follow-up time of 5.0 (4.1–5.7) years. Results Patients who experienced WKF were slightly older, more frequently women, and had longer diabetes duration. Patients experiencing WKF, regardless of baseline kidney function, had a higher risk of subsequent cardiovascular events, including the composite of cardiovascular death or hospitalization for heart failure (HHF), with ≈2-fold higher risk. Joint modeling showed that renal function deterioration frequently occurs even among patients who did not experience a cardiovascular event. In multistate models, patients with a medium-high cardiovascular risk (compared with those with a low cardiovascular risk) are at higher risk of HHF or cardiovascular death first (HR=4.76, 95% CI 3.63 to 6.23) than of WKF first (HR=1.37, 95% CI 1.21 to 1.56); remarkably, the risk of cardiovascular death or HHF is highest after a WKF event (HR=6.20, 95% CI 2.71 to 14.8). Conclusions In patients with T2D and a high cardiovascular risk, WKF occurs in more than 10% of patients and is independently associated with risk of subsequent cardiovascular events, irrespective of baseline eGFR. Preventing serious WKF and the transition from WKF to HHF or cardiovascular death is an important objective of future trials. Trial registration number NCT00000620 .