Diabetic nephropathy is the leading cause of end-stage renal failure in the Western World and accounts for significant morbidity and mortality in patients with diabetes. Although hyperglycaemia and hypertension are established key determinants in the development of the complication, recent studies suggest that a low-grade inflammatory response may also play a role. Monocyte Chemoattractant Protein 1 (MCP-1), a potent chemokine produced by renal cells, has emerged as a very important player in this process. Specifically, it has been shown that MCP-1 is overexpressed in the kidneys from diabetic animals. Furthermore, there is amelioration of both functional and structural abnormalities in MCP-1- knockout mice in the setting of concomitant diabetes. Over recent years the cellular mechanisms linking MCP-1 to kidney injury have been increasingly delineated and, in particular, it has become evident that MCP-1 contributes to the kidney damage not only by inducing mononuclear cell recruitment, but also by direct activation of resident renal cells. The present review focuses on the most significant advances in understanding the role of MCP-1 in diabetic kidney disease and future potential therapeutic implications.