Diabetic kidney disease (DKD) is a substantial complication of type 2 diabetes (T2D), presenting challenges in chronic kidney disease (CKD) management. In addition to traditional and recent therapies, including angiotensin, converting enzyme (ACE) inhibitors, angiotensin receptor blockers, sodium-glucose cotransporter 2 (SGLT2) inhibitors, and mineralocorticoid receptor antagonists, the evolution of antihyperglycemic treatments has introduced a promising agent, glucagon-like peptide-1 receptor agonist (GLP-1RA) for the management of DKD. GLP-1RAs enhance insulin release and reduce glucagon release, offering a novel approach to DKD management. This review analyzes the molecular pathways through which GLP1-RAs confer renal protection in T2D and DKD, which are complex and multifaceted. They include modulation of renal hemodynamics, antioxidative and anti-inflammatory actions, metabolic regulation, and direct cellular effects. These mechanisms highlight GLP1-RA’s potential as a therapeutic option for glycemic control and direct or indirect renal function protection in diabetic patients, emphasizing the potentiality of GLP-1RAs for dual therapy, with cardiovascular and renal protection as a holistic approach. Clinical evidence supports GLP-1RAs in reducing albuminuria and enhancing kidney outcomes, highlighting their value in a comprehensive DKD management strategy.