One in five patients with diabetic kidney dysfunction is anemic. Low hemoglobin levels in this population are associated with an increased risk of progression to end-stage renal disease, increased cardiovascular morbidity and mortality, hypertension, retinopathy, neuropathy and foot ulcers. Here, Merlin Thomas from the Baker Medical Research Institute in Melbourne explores the pathophysiology of anemia in diabetic kidney disease, and the clinical utility of its correction.