Approximately a third of patients with diabetes develop diabetic kidney disease, and diabetes is the leading cause of end-stage renal disease in most developed countries. Hyperglycaemia is known to activate genes that ultimately lead to extracellular matrix accumulation, the hallmark of diabetic nephropathy. Several transcription factors have been implicated in glucose-mediated expression of genes involved in diabetic nephropathy. This review focuses on the transcription factors upstream stimulatory factors 1 and 2 (USF1 and 2), activator protein 1 (AP-1), nuclear factor (NF)-kappaB, cAMP-response-element-binding protein (CREB), nuclear factor of activated T cells (NFAT), and stimulating protein 1 (Sp1). In response to high glucose, several of these transcription factors regulate the gene encoding the profibrotic cytokine transforming growth factor beta, as well as genes for a range of other proteins implicated in inflammation and extracellular matrix turnover, including thrombospondin 1, the chemokine CCL2, osteopontin, fibronectin, decorin, plasminogen activator inhibitor 1 and aldose reductase. Identifying the molecular mechanisms by which diabetic nephropathy occurs has important clinical implications as therapies can then be tailored to target those at risk. Strategies to specifically target transcription factor activation and function may be employed to halt the progression of diabetic nephropathy.