Type 2 diabetes mellitus (T2DM) leads to many health problems like diabetic nephropathy (DN). One of the key factors for chronic kidney disease and end-stage renal disease (ESRD) is T2DM. Extensive work is being done to delineate the pathogenesis of DN and to extend possible remedies. This review is intended to understand the nature of DN risk factors, progression, effects of glycemic levels, and stages of DN. We also explored the novel diagnostic and therapeutic approaches for DN such as gene therapy and stem cell treatments.