Kidney organoids derived from human pluripotent stem cells (hPSCs) have emerged as powerful platforms for translational nephrology, enabling complex renal pathophysiology modeling in physiologically relevant three-dimensional contexts. This review synthesizes recent advances in kidney organoid applications for disease modeling and drug discovery, highlighting their translational potential beyond developmental biology. These organoids recapitulate key human kidney architectural features, including nephron-like structures with glomeruli and tubules, while exhibiting greater cellular heterogeneity than traditional two-dimensional cultures. They effectively model monogenic renal disorders including autosomal dominant polycystic kidney disease (ADPKD), congenital nephrotic syndrome, and Alport syndrome, as well as acquired conditions like acute kidney injury and drug-induced nephrotoxicity. Kidney organoids serve as predictive nephrotoxicity screening platforms, demonstrating dose- and time-dependent responses to cisplatin, tenofovir, and aristolochic acid. However, significant challenges persist, including insufficient vascularization, developmental immaturity, segmental bias, absent urinary drainage systems, and reproducibility variability. Emerging bioengineering strategies-including endothelial co-culture, microfluidic integration, and 3D bioprinting-aim to address these limitations. Integrating stem cell biology with engineering innovations and multi-omics technologies will be crucial for refining kidney organoids into scalable, reproducible models that faithfully recapitulate human kidney physiology and disease, ultimately enabling their translation into precision medicine applications.