Proteinuria and serum creatinine are commonly employed biomarkers for monitoring the advancement of diabetic nephropathy, but they may not comprehensively capture all types of lesions and are indicative of declining glomerular filtration rate only in the later stages. Recent research has identified biomarkers reflecting different aspects of diabetic kidney disease (DKD) that can provide information on the risk of DKD progression and associated poor prognosis. This review outlines several biomarkers, such as renal injury molecule-1, Neutrophil gelatinase-associated lipocalin, heat shock protein 72, soluble urokinase plasminogen activator receptor, angiopoetin-Like protein-4, monocyte chemoattractant protein-1, and liver-type fatty acid-binding protein. The research revealed that, following adjustingments for serum creatinine or estimated glomerular filtration rate and proteinuria, the concentrations of plasma and urine biomarkers remained elevated in individuals with diabetic kidney disease and were additionally correlated with the progression of DKD. These new biomarkers represent different biological pathways such as tubular injury, glomerular injury, tubular dysfunction, and inflammation, and can be used as liquid biopsies to better characterize the disease of diabetic nephropathy. Novel blood and urine biomarkers improve clinicians' ability to assess the prognosis of DKD progression and may improve understanding of the pathophysiology of DKD. However, for preclinical biomarkers associated with DKD outcomes, there was considerable heterogeneity between study cohorts and designs, limiting the comparison of prognostic performance between different studies. Larger clinical studies are needed to determine how these biomarkers could be used in the clinic to improve the clinical management of DKD.