The past 2 decades have brought rapid advances in treatment options for chronic kidney disease; however, even with the best treatment, the decline of renal function and progression to end-stage renal disease (ESRD) continues in a significant number of patients. The prognosis of patients with diabetes and ESRD is grim, with < 50% of patients surviving beyond 5 years after diagnosis. Therefore, early recognition and optimal use of available interventions are essential, and research into newer therapeutic targets is needed. This article will review recent advances in our understanding of renal pathophysiology, summarize the evidence to date supporting current treatment options for diabetic nephropathy, and highlight new options that lie on the horizon for the treatment of diabetic kidney disease.