Fufang Xue Shuan Tong (FXST) capsules, a traditional Chinese medicine, have been used to treat diabetic nephropathy for many years. FXST has been shown to attenuate elevated levels of oxidative stress in the retina of diabetic rats. However, whether FXST protects kidneys through the same mechanism(s) remains unclear. In this study, diabetes was induced in rats by administration of a high-fat diet and low-dose streptozotocin. Rats were administered low (450 mg/kg/day), middle (900 mg/kg/day) or high (1800 mg/kg/day) doses of FXST orally for 3 months. Another group was administered 50 mg/kg/day orally for the same period. The results indicated that all doses of FXST reduced urinary protein excretion and creatinine clearance and ameliorated the diabetic nephropathy-related mesangial matrix expansion. However, only middle and high doses of FXST prevented glomerular hypertrophy in diabetic rats, and the high dose showed the greatest inhibitory effect with regard to mesangial matrix expansion. Furthermore, superoxide dismutase activities were significantly elevated, whereas malondialdehyde levels were significantly reduced in the renal cortex following FXST treatment. The kidney-protective role of FXST is not inferior to that of captopril, one of the most commonly used drugs for the treatment of diabetic nephropathy. In conclusion, FXST retards the progression of diabetic nephropathy, while high-dose FXST shows the most prominent effect in counteracting the pathological changes of diabetic nephropathy. The renoprotective action of FXST is induced by the reduction of oxidative stress in diabetic nephropathy.