Diabetic nephropathy results from chronic (or uncontrolled) hyperglycemia and is the leading cause of kidney failure. The kidney's glomerular podocytes are highly susceptible to diabetic injury and subsequent non-reversible degeneration. We generated a human induced pluripotent stem (iPS) cell-derived model of diabetic podocytopathy to investigate disease pathogenesis and progression. The model recapitulated hallmarks of podocytopathy that precede proteinuria including retraction of foot processes and podocytopenia (detachment from the extracellular matrix (ECM)). Moreover, hyperglycemia-induced injury to podocytes exacerbated remodeling of the ECM. Specifically, mature podocytes aberrantly increased expression and excessively deposited collagen (IV)α1α1α2 that is normally abundant in the embryonic glomerulus. This collagen (IV) imbalance coincided with dysregulation of lineage-specific proteins, structural abnormalities of the ECM, and podocytopenia - a mechanism not shared with endothelium and is distinct from drug-induced injury. Intriguingly, repopulation of hyperglycemia-injured podocytes on decellularized ECM scaffolds isolated from healthy podocytes attenuated the loss of synaptopodin (a mechanosensitive protein associated with podocyte health). These results demonstrate that human iPS cell-derived podocytes can facilitate studies to uncover the mechanisms of chronic hyperglycemia and ECM remodeling and guide disease target identification.