Despite current therapies, many diabetic patients will suffer from declining renal function in association with progressive kidney inflammation. Recently, animal model studies have demonstrated that kidney macrophage accumulation is a critical factor in the development of diabetic nephropathy. However, specific anti-inflammatory strategies are not yet being considered for the treatment of patients with diabetic renal injury. This review highlights the chemokine monocyte chemoattractant protein-1 (MCP-1)/CC-chemokine ligand 2 as a major promoter of inflammation, renal injury, and fibrosis in diabetic nephropathy. Researchers have found that diabetes induces kidney MCP-1 production and that urine MCP-1 levels can be used to assess renal inflammation in this disease. In addition, genetic deletion and molecular blocking studies in rodents have identified MCP-1 as an important therapeutic target for treating diabetic nephropathy. Evidence also suggests that a polymorphism in the human MCP-1 gene is associated with progressive kidney failure in type 2 diabetes, which may identify patients at higher risk who need additional therapy. These findings provide a strong rationale for developing specific therapies against MCP-1 and inflammation in diabetic nephropathy.