Background: The maintenance of a healthy epithelial-endothelial juxtaposition requires cross-talk within glomerular cellular niches. Neovascularization and nodular mesangial sclerosis are manifestations of dysregulated communication in diabetic kidney disease (DKD). We sought to understand the spatially-anchored regulation and transition of endothelial and mesangial cells from health to injury in DKD. Methods: From 77 human kidney biopsy samples, an integrated multi-omics approach was leveraged to identify cellular niches, cell-cell communication, cell injury trajectories, and regulatory transcription factor (TF) networks in glomerular endothelial and mesangial cells. Data were culled from single nucleus RNA sequencing, single nucleus ATAC sequencing, and three orthogonal spatial transcriptomic technologies. Molecular information was correlated with histopathological manifestations of DKD and queried in a human clinical trial dataset. Results: We identified a cellular niche of the diabetic glomerulus enriched in a proliferative endothelial cell sub type (prEC) and altered vascular smooth muscle cells (VSMCs). Cellular communication within this niche maintained pro-angiogenic signaling with loss of anti-angiogenic factors. We identified a TF network of MEF2C, MEF2A, and TRPS1 which regulated SEMA6A and PLXNA2, a receptor-ligand pair opposing angiogenesis. In silico knockout of the TF network led to disruption of the transition from a healthy glomerular capillary endothelial cell (EC-GC) to a prEC, with concomitant acceleration toward a degenerative (injury) endothelial phenotype. Glomeruli enriched in the prEC niche had histologic evidence of neovascularization and a second pro-fibrotic niche mapped in segmentally sclerotic DKD glomeruli. MEF2C activity was increased in diabetic glomeruli and more so in glomeruli with nodular mesangial sclerosis. The gene regulatory network (GRN) of MEF2C was dysregulated in EC-GCs of patients with DKD, but sodium glucose trasporter-2 inhibitor (SGLT2i) treatment reversed the MEF2C GRN effects of DKD. Conclusions: The MEF2C, MEF2A, and TRPS1 TF network carefully balances the fate of the EC-GC in DKD. When the TF network is 'on' or over-expressed in DKD, an EC-GC may progress to a prEC state. When the TF network is off, the EC-GC progresses toward a cell death state. prEC abundance and signaling underlie neovascularization in DKD. SGLT2i therapy restores the balance of MEF2C activity in DKD.