Objective: This study examined the associations of four estimated muscle-related indices (height-adjusted appendicular skeletal muscle mass [ASM/height²], weight-adjusted ASM [ASM/weight], predicted skeletal muscle mass index [pSMI], and creatinine-to-cystatin C ratio [CCR]) with progression from prediabetes to type 2 diabetes mellitus (T2DM) and compared their preliminary predictive performance. Methods: This retrospective cohort included 927 Chinese adults with prediabetes. Incident T2DM was the primary endpoint. Associations were assessed using Cox regression, dose–response relationships using restricted cubic splines, and incremental discrimination using time-dependent AUC with bootstrap internal validation. Subgroup analyses were performed by sex and body mass index (BMI). Sensitivity analyses additionally adjusted for age and HbA1c and excluded early incident T2DM cases. Results: During a median follow-up of 4.23 years, 211 participants (22.76%) developed T2DM. In the primary multivariable model, ASM/weight (HR = 0.54 [0.34, 0.86], p = 0.009) and pSMI (HR = 0.73 [0.53, 0.99], p = 0.041) were inversely associated with T2DM. However, only ASM/weight remained significant after false discovery rate correction, and all associations were attenuated after additional adjustment for age and HbA1c. After excluding early incident T2DM cases, the association of ASM/weight was no longer significant. CCR showed a U-shaped association. The incremental discriminative value of all four indices was modest and became negligible after optimism correction. Exploratory analyses suggested possible sex-related heterogeneity for ASM/weight and CCR, whereas BMI-stratified findings were not supported by significant interaction tests. Conclusions: Estimated muscle-related indices may serve as potential risk markers in prediabetes, but their incremental predictive value beyond established risk factors is limited and requires external validation before clinical application.