Diabetic kidney disease (DKD) is the leading cause of end-stage renal disease (ESRD) worldwide. Renin-angiotensin-aldosterone system (RAAS) inhibitors and sodium-glucose co-transporter 2 (SGLT2) inhibitors have shown efficacy in reducing the risk of ESRD. However, patients vary in their response to RAAS blockades, and the pharmacodynamic responses to SGLT2 inhibitors decline with increasing severity of renal impairment. Thus, effective therapy for DKD is yet unmet. Transforming growth factor-β1 (TGF-β1), expressed by nearly all kidney cell types and infiltrating leukocytes and macrophages, is a pleiotropic cytokine involved in angiogenesis, immunomodulation, and extracellular matrix (ECM) formation. An overactive TGF-β1 signaling pathway has been implicated as a critical profibrotic factor in the progression of chronic kidney disease in human DKD. In animal studies, TGF-β1 neutralizing antibodies and TGF-β1 signaling inhibitors were effective in ameliorating renal fibrosis in DKD. Conversely, a clinical study of TGF-β1 neutralizing antibodies failed to demonstrate renal efficacy in DKD. However, overexpression of latent TGF-β1 led to anti-inflammatory and anti-fibrosis effects in non-DKD. This evidence implied that complete blocking of TGF-β1 signaling abolished its multiple physiological functions, which are highly associated with undesirable adverse events. Ideal strategies for DKD therapy would be either specific and selective inhibition of the profibrotic-related TGF-β1 pathway or blocking conversion of latent TGF-β1 to active TGF-β1.