Insulin resistance is a critical process in the initiation and progression of diabetic nephropathy (DN). Alprostadil (Prostaglandin E1, PGE1) had protective effects on renal function. However, it is unknown whether PGE1 inhibited insulin resistance in renal tubule epithelial cells via autophagy, which plays a protective role in DN against insulin resistance. Insulin resistance was induced by palmitic acid (PA) in human HK-2 cells, shown as the decrease of insulin-stimulated AKT phosphorylation, glucose transporter-4 (GLUT4), glucose uptake and enhanced phosphorylation of insulin receptor substrate 1(IRS-1) at site serine 307 (pIRS-1ser307) and downregulated expression of IRS-1. Along with less abundance of p62, autophagy markers LC3B and Beclin-1 significantly increased in HK-2 cells exposed to PA. Such abnormal changes were significantly reversed by PGE1, which mimicked the role of autophagy gene 7 small interfering RNA (ATG7 siRNA). Furthermore, PGE1 promoted the protein expression of autophagy-related fibroblast growth factor-21 (FGF21), which alleviated insulin resistance. Results from western blotting and immunohistochemistry indicated that PGE1 remarkably restored autophagy, insulin resistance and the FGF21 expression in rat kidney of type 2 diabetes mellitus (T2DM). Collectively, we demonstrated the potential protection of PGE1 on insulin resistance in renal tubules via autophagy-dependent FGF21 pathway in preventing the progression of DN.