Renal lipotoxicity, the maladaptive accumulation of lipid species in nonadipose kidney cells, is a key driver of chronic kidney disease (CKD), especially in individuals with diabetes. Insulin resistance, hyperinsulinemia, hyperglycemia, dyslipidemia, and inflammation converge to disrupt renal lipid metabolism, resulting in toxic lipid deposition, mitochondrial dysfunction, and fibrosis, linking renal injury to the broader cardiovascular-kidney-metabolic (CKM) syndrome. This article synthesizes current evidence on the molecular and cellular mechanisms of renal lipotoxicity, its contribution to diabetic kidney disease (DKD) and CKM syndrome, and emerging therapeutic strategies targeting lipid dysregulation. In the kidney dysregulated lipid transporters, including CD36, FATPs, and FABPs, increase lipid uptake, while SREBPs and ChREBP drive de novo lipogenesis. Impaired fatty acid oxidation due to PPARα downregulation and defective cholesterol efflux via ATP-binding cassette transporter A1 (ABCA1) and ATP-binding cassette transporter G1 (ABCG1) further exacerbate lipid accumulation. Podocytes, mesangial cells, endothelial cells, macrophages, and tubular epithelial cells undergo cell-specific injuries that trigger oxidative stress, endoplasmic reticulum stress, inflammation, and fibrotic remodeling. Mitochondrial dysfunction emerges as a unifying mechanism linking lipid overload to progressive nephron loss. Therapeutic interventions-including lifestyle modification, sodium-glucose cotransporter 2 inhibitors, glucagon-like peptide 1 receptor agonists, thiazolidinediones, statins, fibrates, proprotein convertase subtilisin/kexin type 9 (PCSK9) inhibitors, and ABCA1 inducers-show potential to restore lipid homeostasis and preserve renal function. By connecting systemic metabolic dysfunction to CKD progression and cardiovascular risk, targeting renal lipotoxicity represents a promising therapeutic frontier in DKD and CKM syndrome, emphasizing the need for integrated metabolic and renal management strategies.