Diabetes mellitus (DM) is increasingly recognized as a heterogeneous condition. The individualization of care and treatment necessitates an understanding of the individual patient's pathophysiology of DM that underpins their DM classification and clinical presentation. Classical type-2 diabetes mellitus is due to a combination of insulin resistance and an insulin secretory defect. Type-1 diabetes is characterized by a near-absolute deficiency of insulin secretion. More recently, advances in genetics and a better appreciation of the atypical features of DM has resulted in more categories of diabetes. In the context of kidney disease, patients with DM and microalbuminuria are more insulin resistant, and insulin resistance may be a pathway that results in accelerated progression of diabetic kidney disease. This review summarizes the updated classification of DM, including more rarer categories and their associated renal manifestations that need to be considered in patients who present with atypical features. The benefits and limitations of the tests utilized to make a diagnosis of DM are discussed. We also review the putative pathways and mechanisms by which insulin resistance drives the progression of diabetic kidney disease.