Diabetic nephropathy (DN) is the leading cause of end-stage kidney disease worldwide but current treatments remain suboptimal. The role of inflammation in DN has only recently been recognized. It has been shown that the NLRP3-inflammasome contributes to DN development by inducing interleukin (IL)-1β processing and secretion. In an effort to understand other IL-1β activating mechanism during DN development, we examined the role of the NLRC4-inflammasome in DN and found that NLRC4 is a parallel mechanism, in addition to the NLRP3-inflammasome, to induce pro-IL-1β processing and activation. We found that the expression of NLRC4 is elevated in DN kidneys. NLRC4-deficiency results in diminished DN disease progression, as manifested by a decrease in blood glucose and albumin excretion, as well as preserved renal histology. We further found that DN kidneys have increased F4/80+ macrophages, increased IL-1β production, and other signaling pathways related to kidney pathology such as activation of NF-κB and MAP kinase pathways, all of which were rescued by NLRC4-deficiency. This study demonstrates NLRC4-driven IL-1β production as critical for the progression of DN, which underscores the importance to target this pathway to alleviate this devastating disease.