In Caucasians with type 2 diabetes, circulating TNF receptors 1 (TNFR1) and 2 (TNFR2) predict end-stage renal disease (ESRD). Here we examined this relationship in a longitudinal cohort study of American Indians with type 2 diabetes with measured glomerular filtration rate (mGFR, iothalamate) and urinary albumin-to-creatinine ratio (ACR). ESRD was defined as dialysis, kidney transplant, or death attributed to diabetic kidney disease. Age-gender-adjusted incidence rates and incidence rate ratios of ESRD were computed by Mantel–Haenszel stratification. The hazard ratio of ESRD was assessed per interquartile range increase in the distribution of each TNFR after adjusting for baseline age, gender, mean blood pressure, HbA1c, ACR, and mGFR. Among the 193 participants, 62 developed ESRD and 25 died without ESRD during a median follow-up of 9.5 years. The age-gender-adjusted incidence rate ratio of ESRD was higher among participants in the highest versus lowest quartile for TNFR1 (6.6, 95% confidence interval (CI) 3.3–13.3) or TNFR2 (8.8, 95% CI 4.3–18.0). In the fully adjusted model, the risk of ESRD per interquartile range increase was 1.6 times (95% CI 1.1–2.2) as high for TNFR1 and 1.7 times (95% CI 1.2–2.3) as high for TNFR2. Thus, elevated serum concentrations of TNFR1 or TNFR2 are associated with increased risk of ESRD in American Indians with type 2 diabetes after accounting for traditional risk factors including ACR and mGFR.