The study involved Pima Indians in Arizona, who have disproportionately high rates of diabetes and obesity.
They may be ``the tip of the iceberg, letting us know what's in the future for the rest of America if we don't do something about the childhood obesity epidemic," said Dr. David Ludwig, director of the obesity program at Children's Hospital Boston. He was not involved in the research.
The study appears in today's Journal of the American Medical Association.
It involved a group of Indians whom National Institutes of Health researchers have been tracking since 1965.
Of the 1,865 participants with Type 2 diabetes, 96 developed it in childhood.
The average age of youth-onset diabetes was about 17, although the disease was diagnosed in children as young as 3 1/2.
During at least 15 years of follow-up, 15 children -- or 16 percent -- of those with childhood-onset Type 2 diabetes developed end-stage kidney failure or died from diabetic kidney disease by age 55. That's compared with 133, or 8 percent , of those who developed diabetes after age 20.
The researchers calculated that the incidence of end-stage kidney failure and death by age 55 was nearly five times higher in people who developed Type 2 diabetes before age 20 than in those who developed diabetes in adulthood.
Most of the 20 million Americans with diabetes are adults with Type 2. While Type 2 diabetes in children was almost unheard of a generation ago, the incidence has increased substantially in the past decade, largely because of obesity and lack of exercise.
Diabetes impairs the body's ability to regulate blood sugar levels. That can lead to damage to the kidneys and blood vessels throughout the body.