Thyroid hormone (TH) signaling is a universal regulator of metabolism, growth, and development. Here, we show that TH-TH receptor (TH-TR) axis alterations are critically involved in diabetic nephropathy-associated (DN-associated) podocyte pathology, and we identify TRα1 as a key regulator of the pathogenesis of DN. In ZSF1 diabetic rats, T3 levels progressively decreased during DN, and this was inversely correlated with metabolic and renal disease worsening. These phenomena were associated with the reexpression of the fetal isoform TRα1 in podocytes and parietal cells of both rats and patients with DN and with the increased glomerular expression of the TH-inactivating enzyme deiodinase 3 (DIO3). In diabetic rats, TRα1-positive cells also reexpressed several fetal mesenchymal and damage-related podocyte markers, while glomerular and podocyte hypertrophy was evident. In vitro, exposing human podocytes to diabetes milieu typical components markedly increased TRα1 and DIO3 expression and induced cytoskeleton rearrangements, adult podocyte marker downregulation and fetal kidney marker upregulation, the maladaptive cell cycle induction/arrest, and TRα1-ERK1/2-mediated hypertrophy. Strikingly, T3 treatment reduced TRα1 and DIO3 expression and completely reversed all these alterations. Our data show that diabetic stress induces the TH-TRα1 axis to adopt a fetal ligand/receptor relationship pattern that triggers the recapitulation of the fetal podocyte phenotype and subsequent pathological alterations.