The chronic inflammation in diabetes often leads to functional iron deficiency, which in turn results in iron-deficiency anemia (IDA). Abnormal iron metabolism and insufficient oxygen supply caused by anemia both play a role in kidney damage. However, there is currently limited research on the association between IDA and diabetic kidney disease (DKD) risk. To examine the causal connection between IDA and the development of DKD, alongside assessing the safety of iron supplementation therapy. Furthermore, the study also aims to investigate potential mechanisms and essential molecules involved in this pathogenesis. Our research has found that IDA can elevate the risk of developing DKD. Kidney damage arising from iron deficiency may be connected to oxidative stress, heightened transport of small molecules, and additional factors. Administering iron supplementation as a remedy for IDA poses no risk concerning the occurrence of DKD, and an augmentation in liver iron content is linked to a diminished risk of DKD.