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Sodium-glucose cotransporter 2 inhibitors reduce the risk of kidney disease progression in patients with diabetic kidney disease (DKD); however, evidence describing early clinical and biological changes following treatment initiation in routine clinical practice remains limited. This study used a dual-phase design to evaluate serum C1q/tumor necrosis factor-related protein 7 (CTRP7) and the effects of dapagliflozin in DKD. In the cross-sectional phase, 108 participants were categorized into healthy controls, type 2 diabetes without kidney disease, and DKD groups to assess serum CTRP7 expression. In the longitudinal phase, 48 patients with DKD received dapagliflozin therapy and were followed for 12 weeks to monitor clinical and biochemical changes. Serum CTRP7 levels increased progressively with disease severity. A nomogram integrating systolic blood pressure, glycated hemoglobin, body mass index, and serum CTRP7 demonstrated strong predictive performance for identifying DKD risk. After 12 weeks of dapagliflozin treatment, urinary albumin-to-creatinine ratio and blood pressure were reduced. Improvements were accompanied by decreased malondialdehyde levels and increased superoxide dismutase levels, suggesting attenuation of oxidative stress. These findings suggest that serum CTRP7 may serve as a potential biomarker of DKD and that dapagliflozin treatment is associated with improvements in renal and inflammatory profiles.