SARS-CoV-2 infections lead to a high risk of hospitalization and mortality in diabetic patients. Why diabetic individuals are more prone to develop severe COVID-19 remains unclear. Here, we established a novel human kidney organoid model that mimics early hallmarks of diabetic nephropathy. High oscillatory glucose exposure resulted in metabolic changes, expansion of extracellular membrane components, gene expression changes determined by scRNAseq, and marked upregulation of angiotensin-converting enzyme 2 (ACE2). Upon SARS-CoV-2 infection, hyperglycemic conditions lead to markedly higher viral loads in kidney organoids compared to normoglycemia. Genetic deletion of ACE2, but not of the candidate receptor BSG/CD147, in kidney organoids demonstrated the essential role of ACE2 in SARS-CoV-2 infections and completely prevented SARS-CoV-2 infection in the diabetogenic microenvironment. These data introduce a novel organoid model for diabetic kidney disease and show that diabetic-induced ACE2 licenses the diabetic kidney to enhanced SARS-CoV-2 replication.