Ethnopharmacological relevance: Traditional Chinese medical herbs have been used in China for a long time to treat different diseases. Based on traditional Chinese medicine (TCM) principle, Chaihuang-Yishen granule (CHYS) was developed and has been employed clinically to treat chronic kidney disease including diabetic nephropathy (DN). The present study was designed to investigate its mechanism of action in treatment of DN. Materials and methods: Diabetic rats were established by having a right uninephrectomy plus a single intraperitoneal injection of STZ. Rats were divided into four groups of sham, diabetes, diabetes with CHYS and diabetes with fosinopril. CHYS and fosinopril were given to rats by gavage for 20 weeks. Samples from blood, urine and kidney were collected for biochemical, histological, immunohistochemical and molecular analyses. Results: Rats treated with CHYS showed reduced 24 h urinary protein excretion, decreased serum TC and TG levels, but CHYS treatment did not affect blood glucose level. Glomerular mesangial expansion and tubulointerstitial fibrosis in diabetic rats were significantly alleviated by CHYS treatment. Moreover, CHYS administration markedly reduced mRNA levels of NF-kappa B p65 and TGF-beta 1, as well as decreased protein levels of NF-kappa B p65, MCP-1, TNF-alpha and TGF-beta 1 in the kidney of diabetic rats. Conclusions: CHYS ameliorates renal injury in diabetic rats through reduction of inflammatory cytokines and their intracellular signaling. (C) 2013 Elsevier Ireland Ltd. All rights reserved.