Diabetic nephropathy (DN) is characterized by abnormal kidney energy metabolism, but its causes and contributions to DN pathogenesis are not clear. To examine this issue, we carried out targeted metabolomics profiling in a mouse model of DN that develops kidney disease resembling the human disorder. We found a distinct profile of increased lactate levels and impaired energy metabolism in kidneys of mice with DN, and treatment with an angiotensin-receptor blocker (ARB) reduced albuminuria, attenuated kidney pathology and corrected many metabolic abnormalities, restoring levels of lactate toward normal while increasing kidney ATP content. We also found enhanced expression of lactate dehydrogenase isoforms in DN. Expression of both the LdhA and LdhB isoforms were significantly increased in kidneys of mice, and treatment with ARB significantly reduced their expression. Single-cell sequencing studies showed specific up-regulation of LdhA in the proximal tubule, along with enhanced expression of oxidative stress pathways. There was a significant correlation between albuminuria and lactate in mice, and also in a Southeast Asian patient cohort consisting of individuals with type 2 diabetes and impaired kidney function. In the individuals with diabetes, this association was independent of ARB and angiotensin-converting enzyme inhibitor use. Furthermore, urinary lactate levels predicted the clinical outcomes of doubling of serum creatinine or development of kidney failure, and there was a significant correlation between urinary lactate levels and biomarkers of tubular injury and epithelial stress. Thus, we suggest that kidney metabolic disruptions leading to enhanced generation of lactate contribute to the pathogenesis of DN and increased urinary lactate levels may be a potential biomarker for risk of kidney disease progression.