The reversibility of diabetic nephropathy remains controversial. Here, we tested whether replacing leptin could reverse the advanced diabetic nephropathy modeled by the leptin-deficient BTBR ob/ob mouse. Leptin replacement, but not inhibition of the renin-angiotensin-aldosterone system (RAAS), resulted in near-complete reversal of both structural (mesangial matrix expansion, mesangiolysis, basement membrane thickening, podocyte loss) and functional (proteinuria, accumulation of reactive oxygen species) measures of advanced diabetic nephropathy. Immunohistochemical labeling with the podocyte markers Wilms tumor 1 and p57 identified parietal epithelial cells as a possible source of regenerating podocytes. Thus, the leptin-deficient BTBR ob/ob mouse provides a model of advanced but reversible diabetic nephropathy for further study. These results also suggest that restoration of lost podocytes is possible but is not induced by RAAS inhibition, possibly explaining the limited efficacy of RAAS inhibitors in promoting repair of diabetic nephropathy.