Diabetic kidney disease is one of the most serious complications of diabetes worldwide and is the leading cause of end-stage renal disease. While research has primarily focused on hyperglycemia as a key player in the pathophysiology of diabetic complications, recently, increasing evidence have underlined the role of adipose inflammation in modulating the development and/or progression of diabetic kidney disease. This review focuses on how adipose inflammation contribute to diabetic kidney disease. Furthermore, it discusses in detail the underlying mechanisms of adipose inflammation, including pro-inflammatory cytokines, oxidative stress, and AMPK/mTOR signaling pathway and critically describes their role in diabetic kidney disease. This in-depth understanding of adipose inflammation and its impact on diabetic kidney disease highlights the need for novel interventions in the treatment of diabetic complications.