Sepsis is a severe and dysregulated inflammatory response to infection characterized by end-organ dysfunction distant from the primary site of infection. Development of acute kidney injury (AKI) during sepsis increases patient morbidity, predicts higher mortality, has a significant effect on multiple organ functions, is associated with an increased length of stay in the intensive care unit, and hence consumes considerable healthcare resources. When compared with AKI of nonseptic origin, septic AKI is characterized by a distinct pathophysiology and therefore requires a different approach. Despite impressive advances in several fields of medicine, the pathophysiology, diagnostic procedures, and appropriate therapeutic interventions in sepsis are still highly debatable. Numerous immunomodulatory agents showing promise in preclinical studies fail to reduce the overwhelmingly high mortality rate of sepsis and provoke AKI when compared with other critically ill patients. Major impediments to progress in understanding, early diagnosis, and application of appropriate therapeutic modalities in sepsis-induced AKI include limited histopathologic information, few animal models that closely mimic human sepsis, and a relative shortage of specific diagnostic tools. Here we discuss the most recent advances in understanding the fundamental mechanisms of sepsis-induced AKI, characteristics of relevant animal models available, and potential therapies.