We investigated whether renal hedgehog interacting protein (Hhip) expression contributes to the progression of diabetic nephropathy (DN) and studied its related mechanism(s) in vivo and in vitro. Here, we show that Hhip expression is highly elevated in glomerular endothelial cells of adult type 1 diabetic (T1D) Akita and T2D db/db mouse kidneys as compared to non-diabetic control littermates. Hyperglycemia enhances reactive oxygen species (ROS) generation via NADPH oxidase 4 (Nox4) activation and stimulates renal Hhip gene expression, and that elevated renal Hhip gene expression subsequently activates the TGFβ1- Smad2/3 cascade and promotes endothelial to mesenchymal transition associated with endothelial cell fibrosis/apoptosis in vivo and in vitro. Furthermore, kidneys of low-dose streptozotocin-induced diabetic heterozygous Hhip deficient (Hhip+/-) mice displayed a normal albumin/creatinine ratio with fewer features of DN (glomerulosclerosis/fibrosis and podocyte apoptosis/loss) and less evidence of renal compensation (glomerular hypertrophy and hyperfiltration) as compared to diabetic wild type controls (Hhip+/+). Thus, our studies demonstrated that renal Hhip expression is associated with nephropathy development in diabetes and that hyperglycemia-induced renal Hhip expression may mediate glomerular endothelial fibrosis and apoptosis in diabetes, a novel finding.