Background Rare variants in gene coding regions likely have a greater impact on disease-related phenotypes than common variants through disruption of their encoded protein. We searched for rare variants associated with onset of ESKD in individuals with type 1 diabetes at advanced kidney disease stage. Methods Gene-based exome array analyses of 15,449 genes in five large incidence cohorts of individuals with type 1 diabetes and proteinuria were analyzed for survival time to ESKD, testing the top gene in a sixth cohort (n52372/1115 events all cohorts) and replicating in two retrospective case-control studies (n51072 cases, 752 controls). Deep resequencing of the top associated gene in five cohorts confirmed the findings. We performed immunohistochemistry and gene expression experiments in human control and diseased cells, and in mouse ischemia reperfusion and aristolochic acid nephropathy models. Results Protein coding variants in the hydroxysteroid 17-b dehydrogenase 14 gene (HSD17B14), predicted to affect protein structure, had a net protective effect against development of ESKD at exome-wide significance (n54196; P value53.3 3 10²⁷). The HSD17B14 gene and encoded enzyme were robustly expressed in healthy human kidney, maximally in proximal tubular cells. Paradoxically, gene and protein expression were attenuated in human diabetic proximal tubules and in mouse kidney injury models. Expressed HSD17B14 gene and protein levels remained low without recovery after 21 days in a murine ischemic reperfusion injury model. Decreased gene expression was found in other CKD-associated renal pathologies. Conclusions HSD17B14 gene is mechanistically involved in diabetic kidney disease. The encoded sex steroid enzyme is a druggable target, potentially opening a new avenue for therapeutic development.