Purpose: Diabetic kidney disease (DKD), which is related to inflammation and immune response, is the primary vascular complication of diabetes mellitus and also the leading etiology of end-stage renal disease. Urinary extracellular vesicles (UEVs) are an attractive source for biomarker detection as they involve molecular constituents derived from their parental sections of the nephron. In this study, we aimed to search for a potential biomarker in UEVs for the early diagnosis and prediction of DKD, especially before the emergence of microalbuminuria. Patients and Methods: UEVs were isolated from the urine of healthy subjects, prediabetic, and diabetic patients with varying degrees of kidney damage by ultracentrifugation, and the extracted UEVs were used to measure alpha1-antitrypsin (α1-AT) by Western blot. To explore the function of α1-AT in the inflammatory process leading to DKD, we silenced the expression of α1-AT in renal tubular epithelial cells using cell transfection techniques to assess the differential expression of the inflammatory factors such as MCP-1 and TNF-α using qRT-PCR. Results: There was no expression of α1-AT in the UEVs of either healthy or pre-diabetic subjects. Its expression was significantly increased in the UEVs of diabetic patients with normoalbuminuria (prior to microalbuminuria), which was more sensitive and more stable than other renal indexes to predict DKD. Additionally, the expression of α1-AT in UEVs was gradually upregulated with the aggravation of DKD and the decline of renal function. In vitro, the mRNA expression of MCP-1 and TNF-α was significantly decreased when the generation of α1-AT in tubular epithelial cells was inhibited under high glucose stimulation. Conclusion: Our results suggest that α1-AT derived from UEVs, especially in diabetic patients with normoalbuminuria, might serve as a potential noninvasive biomarker for diagnosis of DKD early in the development of the disease and may predict the future decline of renal function.