BACKGROUND: The bidirectional association between worsening kidney function (WKF) and cardiovascular outcomes in type 2 diabetes (T2D) patients with atherosclerotic cardiovascular disease (ASCVD) is unclear. OBJECTIVES: This study aimed to evaluate the bidirectional association between: 1) nonfatal cardiovascular events and WKF; and 2) severe hypoglycemia and WKF. METHODS: We analyzed data from TECOS (Trial Evaluating Cardiovascular Outcomes with Sitagliptin), enrolling 14,671 patients with T2D and ASCVD randomized to sitagliptin or placebo. The primary outcome was a 4-component major adverse cardiovascular event (MACE4) comprising nonfatal myocardial infarction, stroke, cardiovascular death, or unstable angina hospitalization. We also examined hospitalization for heart failure (hHF). WKF was defined as a glomerular filtration rate decline of ≥40% (per the Modification of Diet in Renal Disease formula) or initiation of renal replacement therapy. Cox proportional hazards models assessed associations between WKF and subsequent MACE4 and hHF. RESULTS: Over a median 3-year follow-up, 1,030 (7.0%) experienced WKF. Overall, WKF risk increased after nonfatal myocardial infarction, stroke, or unstable angina (adjusted HR [HRadj]: 2.0; 95% CI: 1.6-2.5) and was higher after hHF (HRadj: 6.1; 95% CI: 4.8-7.9). Median estimated glomerular filtration rate declines before MACE4 and hHF were -3.8% (IQR: -17.4, 9.4) and -9.2% (IQR: -22.7, 6.6), respectively. WKF was associated with increased risks of MACE4 (HRadj: 1.9; 95% CI: 1.5-2.4), hHF (HRadj: 3.2; 95% CI: 2.2-4.6), and severe hypoglycemia (HRadj: 2.8; 95% CI: 1.8-4.4). CONCLUSIONS: In patients with T2D and ASCVD, WKF is common and linked to adverse cardiovascular outcomes and severe hypoglycemia, highlighting the need for early cardiorenal therapies.