We show that diffusion can play an important role in protein-folding kinetics. We explicitly calculate the diffusion coefficient of protein folding in a lattice model. We found that diffusion typically is configuration- or reaction coordinate-dependent. The diffusion coefficient is found to be decreasing with respect to the progression of folding toward the native state, which is caused by the collapse to a compact state constraining the configurational space for exploration. The configuration- or position-dependent diffusion coefficient has a significant contribution to the kinetics in addition to the thermodynamic free-energy barrier. It effectively changes (increases in this case) the kinetic barrier height as well as the position of the corresponding transition state and therefore modifies the folding kinetic rates as well as the kinetic routes. The resulting folding time, by considering both kinetic diffusion and the thermodynamic folding free-energy profile, thus is slower than the estimation from the thermodynamic free-energy barrier with constant diffusion but is consistent with the results from kinetic simulations. The configuration- or coordinate-dependent diffusion is especially important with respect to fast folding, when there is a small or no free-energy barrier and kinetics is controlled by diffusion. Including the configurational dependence will challenge the transition state theory of protein folding. The classical transition state theory will have to be modified to be consistent. The more detailed folding mechanistic studies involving phi value analysis based on the classical transition state theory also will have to be modified quantitatively.