Total glucosides of paeony (TGP) is the major active constituent of Paeonia lactiflora Pall., which has shown renoprotection in experimental diabetic nephropathy. Activation of Janus kinase/signal transducers and activators of transcription (JAK/STAT) is an important mechanism by which hyperglycemia contributes to renal damage. Macrophages also play an essential role in the pathogenesis of diabetic nephropathy. Herein, we investigated the ability of TGP to modulate JAK2/STAT3 activation and macrophage proliferation in rats with streptozotocin (STZ)-induced diabetes. TGP (50, 100, and 200 mg/kg) was administered orally once a day for eight weeks. Levels of p-JAK2 and p-STAT3 were determined by Western blot analysis. Immunohistochemistry and double immunohistochemistry were used to identify p-STAT3, ED-1, PCNA/ED-1, and p-STAT3/ED-1-positive (+) cells. The elevated 24-h urinary albumin excretion rate was markedly attenuated by treatment with 50, 100, and 200 mg/kg TGP. Western blot analysis showed that the significantly increased levels of p-JAK2, p-STAT3 proteins in the kidneys of diabetic rats were significantly inhibited by 50, 100, and 200 mg/kg TGP treatment. The marked accumulation and proliferation of macrophages in diabetic kidneys were significantly inhibited by TGP treatment. ED-1+/p-STAT3+ cells were significantly increased in the kidneys from the model group but were significantly inhibited by TGP treatment. These results show that TGP significantly inhibited diabetic nephropathy progression and suggest that these protective effects are associated with the ability of TGP to inhibit the JAK2/STAT3 pathway and macrophage proliferation and action.