Diabetic nephropathy (DN) is a major cause of chronic kidney failure and characterized by interstitial and glomeruli fibrosis. Epithelial-to-mesenchymal transition (EMT) plays an important role in the pathogenesis of DN. Tong xinluo (TXL), a Chinese herbal compound, has been used in China with established therapeutic efficacy in patients with DN. To investigate the molecular mechanism of TXL improving DN, KK-Ay mice were selected as models for the evaluation of pathogenesis and treatment in DN. In vitro, TGF- β 1 was used to induce EMT. Western blot (WB), immunofluorescence staining, and real-time polymerase chain reaction (RT-PCR) were applied to detect the changes of EMT markers in vivo and in vitro, respectively. Results showed the expressions of TGF- β 1 and its downstream proteins smad3/p-smad3 were greatly reduced in TXL group; meantime, TXL restored the expression of smad7. As a result, the expressions of collagen IV (Col IV) and fibronectin (FN) were significantly decreased in TXL group. In vivo, 24 h-UAER (24-hour urine albumin excretion ratio) and BUN (blood urea nitrogen) were decreased and Ccr (creatinine clearance ratio) was increased in TXL group compared with DN group. In summary, the present study demonstrates that TXL successfully inhibits TGF- β 1-induced epithelial-to-mesenchymal transition in DN, which may account for the therapeutic efficacy in TXL-mediated renoprotection.