Short stature has been associated with increased various disease and all-cause death, but no reliable data exist the association between height and end-stage renal disease (ESRD) in diabetic patients. We investigated the relationship between short stature, development of ESRD, and mortality in type 2 diabetes. This study analyzed clinical data using the National Health Insurance Database in Korea. Height was stratified by five groups according to age and sex. Risk of ESRD and all-cause mortality was analyzed with Cox proportional hazards models. During a 6.9-year follow-up period, 220,457 subjects (8.4%) died and 28,704 subjects (1.1%) started dialysis. Short stature significantly increased the incidence of ESRD and all-cause mortality in the overall cohort analysis. In multivariable analysis, hazard ratios (HR) for development of ESRD comparing the highest versus lowest quartiles of adult height were 0.86 (95% confidence interval (CI), 0.83–0.89). All-cause mortality also decreased with highest height compared to patients with lowest height after fully adjusting for confounding variables (HR 0.79, 95% CI, 0.78–0.81). Adult height had an inverse relationship with newly diagnosed ESRD and all-cause in both males and females. Short stature is strongly associated with an increased risk of ESRD and all-cause mortality in type 2 diabetes.