Diabetic kidney disease (DKD) is the leading cause of end-stage renal disease (ESRD), with prevalence increasing at an alarming rate worldwide and today, there are no known cures. The pathogenesis of DKD is complex, influenced by genetics and the environment. However, the underlying molecular mechanisms that contribute to DKD risk in about one-third of diabetics are still poorly understood. The early stage of DKD is characterized by glomerular hyperfiltration, hypertrophy, podocyte injury and depletion. Recent evidence of glomerular endothelial cell injury at the early stage of DKD has been suggested to be critical in the pathological process and has highlighted the importance of glomerular intercellular crosstalk. A potential mechanism may include reactive oxygen species (ROS), which play a direct role in diabetes and its complications. In this review, we discuss different cellular sources of ROS in diabetes and a new emerging paradigm of endothelial cell dysfunction as a key event in the pathogenesis of DKD.