Increasing incidences of obesity and diabetes have made diabetic kidney disease (DKD) the leading cause of chronic kidney disease and end-stage renal disease worldwide. Despite current pharmacological treatments, including strategies for optimizing glycemic control and inhibitors of the renin-angiotensin system, DKD still makes up almost half of all cases of end-stage renal disease in the United States. Compelling and mounting evidence has clearly demonstrated that immunity and inflammation play a paramount role in the pathogenesis of DKD. This article reviews the involvement of the immune system in DKD and identifies important roles of key immune and inflammatory mediators. One of the most recently identified biomarkers is serum amyloid A (SAA), which appears to be relatively specific for DKD. Novel and evolving treatment approaches target protein kinases, transcription factors, chemokines, adhesion molecules, growth factors, advanced glycation end-products and other inflammatory molecules. This is the beginning of a new era in the understanding and treatment of DKD and we may have finally reached a tipping point in our fight against the growing burden of DKD.