Globally, diabetes is the leading cause of chronic kidney disease and end-stage renal disease, which are major risk factors for cardiovascular disease and death. Despite this burden, the factors that precipitate the development and progression of diabetic kidney disease (DKD) remain to be fully elucidated. Mitochondrial dysfunction is associated with kidney disease in nondiabetic contexts, and increasing evidence suggests that dysfunctional renal mitochondria are pathological mediators of DKD. These complex organelles have a broad range of functions, including the generation of ATP. The kidneys are mitochondrially rich, highly metabolic organs that require vast amounts of ATP for their normal function. The delivery of metabolic substrates for ATP production, such as fatty acids and oxygen, is altered by diabetes. Changes in metabolic fuel sources in diabetes to meet ATP demands result in increased oxygen consumption, which contributes to renal hypoxia. Inherited factors including mutations in genes that impact mitochondrial function and/or substrate delivery may also be important risk factors for DKD. Hence, we postulate that the diabetic milieu and inherited factors that underlie abnormalities in mitochondrial function synergistically drive the development and progression of DKD.