Diabetic kidney disease (DKD) is the leading cause of end-stage renal disease (ESRD) worldwide. Dipeptidyl peptidase (DPP)-4 inhibitors are widely used in the treatment of patients with type 2 diabetes (T2D). DPP-4 inhibitors reduce glucose levels by inhibiting degradation of incretins. DPP-4 is a ubiquitous protein with exopeptidase activity that exists in cell membrane-bound and soluble forms. It has been shown that an increased renal DPP-4 activity is associated with the development of DKD. A series of clinical and experimental studies showed that DPP-4 inhibitors have beneficial effects on DKD, independent of their glucose-lowering abilities, which are mediated by anti-fibrotic, anti-inflammatory, and anti-oxidative stress properties. In this review article, we highlight the current understanding of the clinical efficacy and the mechanisms underlying renoprotection by DPP-4 inhibitors under diabetic conditions.