Epigenetic modulation may underlie the progression of diabetic nephropathy (DN). Involvement of TGFB1 in mesangial fibrosis of DN led us to hypothesize that Tgfb1 DNA demethylation contributes to progression of DN. In primary mesangial cells from diabetic (db/db) mouse kidneys, demethylation of Tgfb1 DNA and upregulation of Tgfb1 mRNA progressed simultaneously. USF1 binding site in Tgfb1 promoter region were demethylated, and binding of USF1 increased, with decreased binding of DNMT1 in db/db compared with control. Given downregulation of Tgfb1 expression by folic acid, antioxidant Tempol reversed DNA demethylation, with increased and decreased recruitment of DNMT1 and USF1 to the promoter, resulting in decreased Tgfb1 expression in db/db mice. Addition of H2O2 to mesangial cells induced DNA demethylation and upregulated Tgfb1 expression. Finally, Tempol attenuated mesangial fibrosis in db/db mice. We conclude that aberrant DNA methylation of Tgfb1 due to ROS overproduction play a key to mesangial fibrosis during DN progression.