Evidence for assessing the relationship between free triiodothyronine (FT3) and diabetic kidney disease (DKD) remains limited. Therefore, the purpose of our study is to evaluate the relationship between FT3 and DKD. This study is a retrospective cross-sectional study. From June 2022 to October 2023, 3,124 patients with normal thyroid function and diagnosed with type 2 diabetes mellitus (T2DM) were collected continuously and non-selectively in a Chinese hospital. Then, we use logistic regression model to explore the relationship between FT3 and evaluated glomerular filtration rate (eGFR). Smooth curve fitting is used to identify the nonlinear relationship between FT3 and eGFR. After adjusting covariates, the results showed that FT3 was positively associated with eGFR (β=2.34, 95% CI: 0.27, 4.41). There was also a non-linear relationship between FT3 and eGFR. The inflection points of FT3 were 3.47 pmol/L (P=0.002) and 5.17 pmol/L (P=0.012). This study shows that there is a positive correlation and non-linear relationship between FT3 and eGFR in Chinese diabetic kidney disease. When FT3 is 3.47-5.17 pmol/L, eGFR is the most stable and most beneficial for delaying the progression of type 2 diabetic kidney disease. Too high or too low FT3 levels, even within the normal range, accelerate the progression of type 2 diabetic kidney disease. Our study is of great significance to clarify the optimal range of FT3 values that delay the progression of DKD and to guide clinicians in the prevention and treatment of DKD.