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The drastic increase in the number of patients with diabetes and its complications is a global issue. Diabetic nephropathy, the leading cause of chronic kidney disease, significantly affects patients’ quality of life and medical expenses. Furthermore, there are limited drugs for treating diabetic nephropathy patients. Impaired lipid signaling, especially abnormal protein kinase C (PKC) activation by de novo-synthesized diacylglycerol (DG) under high blood glucose, is one of the causes of diabetic nephropathy. DG kinase (DGK) is an enzyme that phosphorylates DG and generates phosphatidic acid, i.e., DGK can inhibit PKC activation under diabetic conditions. Indeed, it has been proven that DGK activation ameliorates diabetic nephropathy. In this review, we summarize the involvement of PKC and DGK in diabetic nephropathy as therapeutic targets, and its mechanisms, by referring to our recent study.