The goal of this study was to explore the association between Src homology 3 domain of SH3 domain containing Ysc84-like 1 (SH3YL1) protein and diabetic nephropathy (DN) in type 2 diabetes mellitus (T2DM). The study included 90 participants, 60 patients with T2DM all recruited from Outpatients Clinic and Internal Medicine Inpatient Department, Beni-Suef University Hospital; and 30 apparently healthy controls. Patients were sub-divided into group I: 20 patients with no albuminuria, group II: 20 patients with microalbuminuria and group III: 20 patients with macroalbuminuria. All participants were subjected to full history taking, routine laboratory investigations and serum SH3YL1 analysis using enzyme-linked immunosorbent (ELISA) assay. Serum SH3YL1  was significantly higher in T2DM patients (5.69 ± 1.6 ng/ml) versus controls (3.76 ±0.80 ng/ml) (p<0.001).There was  statistical significant difference with p <0.05 between cases of group I, and each of group II, and group III as regards SH3YL1 level with lowest mean among group I. There was statistical significant positive correlation between SH3YL1 level and each of fasting blood glucose, 2hours postprandial, glycated hemoglobin, urea, creatinine, albuminuria, total cholesterol and triglycerides. SH3YL1 showed sensitivity of (88.3%) and specificity of (53.3%) at cut off value (3.85 ng/mL) among T2DM patients versus controls (p<0.001). Moreover, sensitivity of (70%, 90%, and 90%) and specificity of (56.7%, 70%, and 86.7%) at cutoff (4 ng/mL, 4.45 ng/mL, and 4.65 ng/mL) was found among groups I, II and III versus control group (p= 0.01, <0.001 and <0.001), respectively. In conclusion, SH3YL1 serum level revealed statistically significant increase among T2DM patients and showed statistical difference between the studied no albuminuria, microalbuminuria and macroalbuminuria groups. Our study suggests SH3YL1 as a promising diagnostic and prognostic marker among DN patients.