Objectives: To determine whether ethnic differences in the incidence of albuminuria are present in patients with diabetes, and to identify social, behavioral, and provider factors that explain ethnic differences. Study Design: Survey follow-up design with a race-stratified baseline survey (2005-2006) in diabetic patients from a nonprofit, fully integrated healthcare system in Northern California. We followed the 10,596 respondents (30% whites, 20% blacks, 23% Hispanics, 14% Asians, and 13% Filipinos) without evidence of prevalent albuminuria at baseline. Methods: Incident albuminuria was defined by positive dipstick urinalysis (>1) or urine albumin to creatinine level (>30 mg/g), and confirmed with repeat testing at least 3 months later. Results: The 27,292 person-years of observation yielded 981 incident albuminuria events. Agestandardized rates of albuminuria (per 1000 person-years) ranged from 13.6 (95% confidence interval [CI] 10.5-17.0) in whites to 27.8 (CI 18.2- 38.3) in blacks. In fully adjusted Cox models, the hazard ratio for blacks (1.22, 95% CI 1.09-1.38), Asians (1.35, 95% CI 1.13-1.61), and Filipinos (1.93, 95% CI 1.61-2.32), but not Hispanics, was significantly greater than it was for whites. In some cases, point estimates changed markedly from the base model when fully adjusted for potential confounders. Moreover, adjustment for an array of potentially mediating factors explained only a small proportion of the observed ethnic disparities. Conclusions: Despite uniform medical care coverage, Filipinos, blacks, and Asians with diabetes developed albuminuria at higher rates than white and Hispanic adults.