Diabetic kidney disease (DKD) is a progressive disorder, which is increasing globally in prevalence due to the increased incidence of obesity and diabetes mellitus. Despite optimal clinical management, a significant number of patients with diabetes develop DKD. Hence, hitherto unrecognized factors are likely to be involved in the initiation and progression of DKD. An extensive number of studies have demonstrated the role of microbiota in health and disease. Dysregulation in the microbiota resulting in a deficiency of short chain fatty acids (SCFAs) such as propionate, acetate, and butyrate, by-products of healthy gut microbiota metabolism, have been demonstrated in obesity, type 1 and type 2 diabetes. However, it is not clear to date whether such changes in the microbiota are causative or merely associated with the diseases. It is also not clear which microbiota have protective effects on humans. Few studies have investigated the centrality of reduced SCFA in DKD development and progression or the potential therapeutic effects of supplemental SCFAs on insulin resistance, inflammation, and metabolic changes. SCFA receptors are expressed in the kidneys, and emerging data have demonstrated that intestinal dysbiosis activates the renal renin-angiotensin system, which contributes to the development of DKD. In this review, we will summarize the complex relationship between the gut microbiota and the kidney, examine the evidence for the role of gut dysbiosis in diabetes and obesity-related kidney disease, and explore the mechanisms involved. In addition, we will describe the role of potential therapies that modulate the gut microbiota to prevent or reduce kidney disease progression.