Type 2 diabetes associates with increased risk of mortality, but how kidney disease contributes to this mortality risk among individuals with type 2 diabetes is not completely understood. Here, we examined 10-year cumulative mortality by diabetes and kidney disease status for 15,046 participants in the Third National Health and Nutrition Examination Survey (NHANES III) by linking baseline data from NHANES III with the National Death Index. Kidney disease, defined as urinary albumin/creatinine ratio ≥30 mg/g and/or estimated GFR ≤60 ml/min per 1.73 m2, was present in 9.4% and 42.3% of individuals without and with type 2 diabetes, respectively. Among people without diabetes or kidney disease (reference group), 10-year cumulative all-cause mortality was 7.7% (95% confidence interval [95% CI], 7.0%–8.3%), standardized to population age, sex, and race. Among individuals with diabetes but without kidney disease, standardized mortality was 11.5% (95% CI, 7.9%–15.2%), representing an absolute risk difference with the reference group of 3.9% (95% CI, 0.1%–7.7%), adjusted for demographics, and 3.4% (95% CI, −0.3% to 7.0%) when further adjusted for smoking, BP, and cholesterol. Among individuals with both diabetes and kidney disease, standardized mortality was 31.1% (95% CI, 24.7%–37.5%), representing an absolute risk difference with the reference group of 23.4% (95% CI, 17.0%–29.9%), adjusted for demographics, and 23.4% (95% CI, 17.2%–29.6%) when further adjusted. We observed similar patterns for cardiovascular and noncardiovascular mortality. In conclusion, those with kidney disease predominantly account for the increased mortality observed in type 2 diabetes.