Diabetic kidney disease is expected to increase rapidly over the coming decades with rising prevalence of diabetes worldwide. Current measures of kidney function based on albuminuria and estimated glomerular filtration rate do not accurately stratify and predict individuals at risk of declining kidney function in diabetes. As a result, recent attention has turned towards identifying and assessing the utility of biomarkers in diabetic kidney disease. This review explores the current literature on biomarkers of inflammation and kidney injury focussing on studies of single or multiple biomarkers between January 2014 and February 2020. Multiple serum and urine biomarkers of inflammation and kidney injury have demonstrated significant association with the development and progression of diabetic kidney disease. Of the inflammatory biomarkers, tumour necrosis factor receptor-1 and -2 were frequently studied and appear to hold most promise as markers of diabetic kidney disease.With regards to kidney injury biomarkers, studies have largely targeted markers of tubular injury of which kidney injury molecule-1, beta-2-microglobulin and neutrophil gelatinase-associated lipocalin emerged as potential candidates. Finally, the use of a small panel of selective biomarkers appears to perform just as well as a panel of multiple biomarkers for predicting kidney function decline.