Peritoneal fibrosis is the final process of progressive changes in the peritoneal membrane due to chronic inflammation and infection. It is one of the main causes of discontinuation of peritoneal dialysis (PD), apart from peritonitis and cardiovascular complications. Over time, morphological changes occur in the peritoneal membranes of patients who use PD. Of those are mesothelial-to-mesenchymal transition (MMT), neoangiogenesis, sub-mesothelial fibrosis, and hyalinizing vasculopathy. Several key molecules are involved in the complex pathophysiology of peritoneal fibrosis, including advanced glycosylation end products (AGEs), transforming growth factor beta (TGF-β), and vascular endothelial growth factor (VEGF). This narrative review will first discuss the physiology of the peritoneum and PD. Next, the multifaceted pathophysiology of peritoneal fibrosis, including the effects of hyperglycemia and diabetes mellitus on the peritoneal membrane, and the promising biomarkers of peritoneal fibrosis will be reviewed. Finally, the current and future management of peritoneal fibrosis will be discussed, including the potential benefits of new-generation glucose-lowering medications to prevent or slow down the progression of peritoneal fibrosis.