Nephropathy is a major microvascular complication of diabetes mellitus and often leads to terminal renal failure in addition to contributing significantly to cardiovascular morbidity and mortality. Despite continuous advances, the pathogenesis of diabetic nephropathy remains poorly understood. Recent studies have underscored the significance of structural and functional changes in podocytes in the development and progression of diabetic nephropathy. The role of podocytes in health and diabetic nephropathy and abnormalities including podocyte hypertrophy, effacement, and apoptosis, and a detailed discussion on the role played by the Wnt-β-catenin signaling pathway in podocyte injury and dysfunction are the focus of this review. In addition, the role played by Wnt signaling in mediating the effects of known therapeutic strategies for diabetic nephropathy is also discussed.