Diabetic nephropathy is a major health challenge with considerable economic burden and significant impact on patients’ quality of life. Despite recent advances in diabetic patient care, current clinical practice guidelines fall short of halting the progression of diabetic nephropathy to end-stage renal disease. Moreover, prior literature reported manifestations of renal dysfunction in early stages of metabolic impairment prior to the development of hyperglycemia indicating the involvement of alternative pathological mechanisms apart from those typically triggered by high blood glucose. Here, we extend our prior research work implicating localized inflammation in specific adipose depots in initiating cardiovascular dysfunction in early stages of metabolic impairment. Non-obese prediabetic rats showed elevated glomerular filtration rates and mild proteinuria in absence of hyperglycemia, hypertension, and signs of systemic inflammation. Isolated perfused kidneys from these rats showed impaired renovascular endothelial feedback in response to vasopressors and increased flow. While endothelium dependent dilation remained functional, renovascular relaxation in prediabetic rats was not mediated by nitric oxide and prostaglandins as in control tissues, but rather an upregulation of the function of epoxy eicosatrienoic acids was observed. This was coupled with signs of peri-renal adipose tissue (PRAT) inflammation and renal structural damage. A two-week treatment with non-hypoglycemic doses of metformin or pioglitazone, shown previously to ameliorate adipose inflammation, not only reversed PRAT inflammation in prediabetic rats, but also reversed the observed functional, renovascular, and structural renal abnormalities. The present results suggest that peri-renal adipose inflammation triggers renal dysfunction early in the course of metabolic disease.