Backgrounds: Accumulating data demonstrated that the cortico-medullary difference in apparent diffusion coefficient (Delta ADC) of diffusion-weighted magnetic resonance imaging (DWI) was a better correlation with kidney fibrosis, tubular atrophy progression, and a predictor of kidney function evolution in chronic kidney disease (CKD). Objectives: We aimed to assess the value of Delta ADC in evaluating disease severity, differential diagnosis, and the prognostic risk stratification for patients with type 2 diabetes (T2D) and CKD. Methods: Total 119 patients with T2D and CKD who underwent renal MRI were prospectively enrolled. Of them, 89 patients had performed kidney biopsy for pathological examination, including 38 patients with biopsy-proven diabetic kidney disease (DKD) and 51 patients with biopsy-proven non-diabetic kidney disease (NDKD) and Mix (DKD + NDKD). Clinicopathological characteristics were compared according to different Delta ADC levels. Moreover, univariate and multivariate-linear regression analyses were performed to explore whether Delta ADC was independently associated with estimated glomerular filtration rate (eGFR) and urinary albumin creatinine ratio (UACR). The diagnostic performance of Delta ADC for discriminating DKD from NDKD + Mix was evaluated by receiver operating characteristic (ROC) analysis. In addition, an individual's 2- or 5-year risk probability of progressing to end-stage kidney disease (ESKD) was calculated by the kidney failure risk equation (KFRE). The effect of Delta ADC on prognostic risk stratification was assessed. Additionally, net reclassification improvement (NRI) was used to evaluate the model performance. Results: All enrolled patients had a median Delta ADC level of 86 (IQR 28, 155) x 10(-6) mm(2)/s. Delta ADC significantly decreased across the increasing staging of CKD (P < 0.001). Moreover, those with pathological-confirmed DKD has a significantly lower level of Delta ADC than those with NDKD and Mix (P < 0.001). It showed that Delta ADC was independently associated with eGFR (beta = 1.058, 95% CI = [1.002,1.118], P = 0.042) and UACR (beta = -3.862, 95% CI = [-7.360, -0.365], P = 0.031) at multivariate linear regression analyses. Besides, Delta ADC achieved an AUC of 0.707 (71% sensitivity and 75% specificity) and AUC of 0.823 (94% sensitivity and 67% specificity) for discriminating DKD from NDKD + Mix and higher ESKD risk categories (>= 50% at 5 years; >= 10% at 2 years) from lower risk categories (<50% at 5 years; <10% at 2 years). Accordingly, the optimal cutoff value of Delta ADC for higher ESKD risk categories was 66 x 10(-6) mm(2)/s, and the group with the low-cutoff level of Delta ADC group was associated with 1.232 -fold (95% CI 1.086, 1.398) likelihood of higher ESKD risk categories as compared to the high-cutoff level of Delta ADC group in the fully-adjusted model. Reclassification analyses confirmed that the final adjusted model improved NRI. Conclusions: Delta ADC was strongly associated with eGFR and UACR in patients with T2D and CKD. More importantly, baseline Delta ADC was predictive of higher ESKD risk, independently of significant clinical confounding. Specifically, Delta ADC <78 x 10(-6) mm(2)/s and <66 x 10(-6) mm(2)/s would help to identify T2D patients with the diagnosis of DKD and higher ESKD risk categories, respectively.