Roughly 3% of patients worldwide with a new diagnosis of type 2 diabetes mellitus (T2DM) already have an overt nephropathy at diagnosis and about 20–30% of the remaining ones develop a complication of this kind later in life. The early identification of kidney disease in diabetic patients is important as it slows its progression, which is important not only because this reduces the need for renal replacement therapy, but also because it decreases the high rate of mortality and morbidity associated with a reduction in kidney function. The increasing prevalence of type 2 diabetes and the consequent greater probability of finding different types of kidney diseases in diabetic patients frequently gives rise to overlapping diagnoses, a definition encompassing the differential diagnosis between diabetic and non-diabetic kidney disease. The issue is made more complex by the acknowledgement of the increasing frequency of presentations of what is termed “diabetic kidney disease” without relevant proteinuria, in particular in T2DM patients. Distinguishing between diabetes related and non-diabetes related forms of kidney disease in diabetic patients is not only a semantic question, as different diseases require different clinical management. However, while the urologic and macrovascular complications of diabetes, as well as overlapping parenchymal damage, can be diagnosed by means of imaging studies, often only a kidney biopsy will make a differential diagnosis possible. In fact, the coexistence of typical diabetic lesions, such as nodular glomerulopathy or glomerulosclerosis, with different glomerular, vascular and tubulo-interstitial alterations has been extensively described, and an analysis of the dominant histological pattern can contribute to determining what therapeutic approach should be adopted. However, due to the high frequency of kidney diseases, and to the fact that T2DM patients are often affected by multiple comorbidities, a kidney biopsy is not generally performed in T2DM patients. What follows is a review aiming to discuss the diagnostic work-up, on the base of clinical, laboratory and imaging criteria, and evaluate the present indications and alternatives to renal biopsy.