<p>Diabetic Kidney Disease (DKD) is a leading cause of chronic kidney disease and end-stage renal disease, significantly impacting global public health. Despite the availability of conventional treatments like renin-angiotensin system (RAAS) inhibitors, disease progression remains a challenge. Pentoxifylline, an anti-inflammatory and immunomodulatory agent, has emerged as a promising adjunctive therapy for DKD. This review explores pentoxifylline’s mechanisms of action, including its effects on inflammation, oxidative stress, fibrosis, and renal function, supported by clinical and preclinical evidence. Studies indicate that pentoxifylline can reduce proteinuria, improve glomerular filtration rate, and protect against kidney fibrosis in DKD, offering a multifaceted approach to disease management. By addressing several key pathways in DKD progression, pentoxifylline may provide an essential addition to existing therapeutic strategies, especially in patients with advanced disease.</p>