Diabetes mellitus presents a significant threat to human health because it disrupts energy metabolism and gives rise to various complications, including diabetic kidney disease (DKD). Metabolic adaptations occurring in the kidney in response to diabetes contribute to the pathogenesis of DKD. Iron metabolism and ferroptosis, a recently defined form of cell death resulting from iron-dependent excessive accumulation of lipid peroxides, have emerged as crucial players in the progression of DKD. In this comprehensive review, we highlight the profound impact of adaptive and maladaptive responses regulating iron metabolism on the progression of kidney damage in diabetes. We summarize the current understanding of iron homeostasis and ferroptosis in DKD. Finally, we propose that precise manipulation of iron metabolism and ferroptosis may serve as potential strategies for kidney management in diabetes.