Diabetic nephropathy is a leading cause of chronic renal failure. Recently, Euonymus alatus showed therapeutic potential in the treatment of diabetes and its chronic complications. In this study, effects of Euonymus alatus and its mechanism in the treatment of diabetic nephropathy were investigated. Diabetic nephropathy was induced in Sprague-Dawley rats by uninephrectomy plus streptozotocin (STZ) administration. Euonymus alatus and irbesartan, as a positive control, were lavaged to these rats for 12 weeks. Our data showed that Euonymus alatus was efficient in lowering HbA1c, improving blood lipids, decreasing 24 h urine protein and protecting kidney function. Pathological studies found kidney damage, including extracellular matrix expansion and glomerulosclerosis, were improved by Euonymus alatus treatment. Further investigation found that the herb had a role in downregulating the expression of transform growth factor β(1). In conclusion, Euonymus alatus has a protective role in diabetic nephropathy, which may be related to its downregulation of transform growth factor β(1) expression.