Diabetic nephropathy (DN) is a major complication in patients with type 1 or type 2 diabetes and represents the leading cause of end-stage renal disease. Current therapeutic options, hyperglycemia and blood pressure control, use of a statins and renin-angiotensin-aldosterone blockers, to some extent retard progression, but do not prevent the development of DN. Novel therapeutic approaches are therefore warranted. In view of a polymorphism in the carnosinase 1 gene CNDP1, resulting in reduced carnosine degradation activity and a significant DN risk reduction, carnosine (β-alanyl-L-histidine) has gained attention as a potential therapeutic target. Carnosine has anti-inflammatory, antioxidant, anti-glycation and reactive carbonyl quenching properties. In diabetic rodents, carnosine supplementation consistently improved renal histology and function and in most studies, also glucose metabolism. Even though plasma half-life of carnosine in humans is short, first intervention studies in (pre-) diabetic patients yielded promising results. The precise molecular mechanisms of carnosine mediated protective action, however, are still incompletely understood. This review highlights the recent knowledge on the role of the carnosine metabolism in DN.