Diabetic kidney disease (DKD) is a global health burden and the leading cause of end-stage renal disease. Its clinical management focuses on controlling hyperglycemia, hypertension, and hyperlipidemia. While the progression of DKD can be slowed with intervention, it cannot be stopped or reversed yet. The pathogenesis of DKD is complex, with an interplay of numerous signaling pathways, and research continues to decipher the players and their role, be it beneficial or pathogenic. Inflammation is an essential defense of our bodies against internal or external insults. The injuries that trigger inflammation range from pathogenic infections and wounds to dysregulated metabolism. Inflammation is helpful only if it is controlled and subsides after it has helped defend the individual against the insult. Uncontrolled or chronic inflammation is recognized as a contributor to numerous chronic diseases. Dysregulated inflammation plays a role in multiple aspects of DKD: glomerular hyperfiltration, mesangial expansion, podocyte injury, tubular injury, basement membrane thickening, fibrosis, and scarring. Since inflammation plays an integral role in the progression of DKD, targeting it for therapy is also reasonable. There is a growing trend of targeting inflammation as a therapeutic approach, with new targets being discovered and evaluated drugs every year. The exponential increase in literature necessitates a comprehensive summary of current information, hence this review.