Background: A urine albumin to creatinine ratio (UACR) >30 mg/g is considered to represent albuminuria, but in type 2 diabetes mellitus, even low-grade albuminuria is associated with increased risk of cardiovascular disease. This study aimed to investigate the effects of metformin and acarbose treatment on urine albumin excretion in Chinese patients with newly diagnosed diabetes and low-grade albuminuria. Material/Methods: Patients with newly diagnosed diabetes (n=589) were divided into Group I (with a baseline UACR <10 mg/g) (n=331), and Group II (with a baseline UACR of 10-30 mg/g) (n=258). Following 48 weeks of treatment with metformin or acarbose, the UACR, blood pressure, body mass index (BMI), blood glucose, lipid profiles, and homeostasis model assessment of insulin resistance (HOMA-IR) were compared. Results: Baseline diastolic blood pressure, levels of blood glucose and low-density lipoprotein cholesterol (LDL-C), and HOMA-IR were significantly increased in Group II compared with Group I (all P<0.05). In Group II, both metformin and acarbose treatment significantly reduced the UACR (P<0.001); the effect was significantly greater following acarbose treatment compared with metformin treatment (P<0.05). In Group I, neither metformin nor acarbose treatment significantly changed the UACR, but both Group I and Group II showed a significant and comparable reduction in BMI, blood glucose, blood pressure, and HOMA-IR. Conclusions: In a group of Chinese patients with newly diagnosed type 2 diabetes mellitus, low-grade albuminuria (baseline UACR of 10-30 mg/g) was associated with metabolic factors before treatment. Treatment with either metformin or acarbose significantly reduced albumin excretion.