Introduction Recent studies demonstrated that circulating fibroblast growth factor (FGF)-23 was associated with risk of end stage renal disease (ESRD) and mortality. This study aims to examine whether the predictive effect of FGF-23 is independent from circulating levels of tumor necrosis factor receptor 1 (TNFR1), a strong predictor of ESRD in Type 2 diabetes (T2D). Methods We studied 380 patients with T2D who were followed for 8–12 years and were used previously to examine the effect of TNFR1. Baseline plasma FGF-23 was measured by immunoassay. Results During follow-up, 48 patients (13%) developed ESRD and 83 patients (22%) died without ESRD. In a univariate analysis, baseline circulating levels of FGF-23 and TNFR1 were significantly higher in subjects who subsequently developed ESRD or died without ESRD than in those who remained alive. In a Cox proportional hazard model, baseline concentration of FGF-23 was associated with increased risk of ESRD, however its effect was no longer significant after controlling for TNFR1 and other clinical characteristics (HR 1.3, p = 0.15). The strong effect of circulating level of TNFR1 on risk of ESRD was not changed by including circulating levels of FGF-23 (HR 8.7, p<0.001). In the Cox multivariate model, circulating levels of FGF-23 remained a significant independent predictor of all-cause mortality unrelated to ESRD (HR 1.5, p<0.001). Conclusions We demonstrated that the effect of circulating levels of FGF-23 on the risk of ESRD is accounted for by circulating levels of TNFR1. We confirmed that circulating levels of FGF-23 have an independent effect on all-cause mortality in T2D.