Astragaloside IV (AS-IV) is a major active ingredient from Radix astragali, which has been considered as a renoprotective agent; however, its molecular mechanisms are unclear. Thus, we designed to investigate the renoprotective effects and mechanisms of AS-IV in rat model of renal fibrosis induced by unilateral ureteral obstruction (UUO) in vivo and TGF-β1-stimulated rat renal fibroblasts (NRK-49F) in vitro. Sprague-Dawley rats were randomly divided into six groups: sham operation, UUO, UUO/AS-IV (3.3, 10, 33 mg·kg(-1)·d(-1)), and UUO/enalapril (4 mg·kg(-1)·d(-1)). Renal function, tubulointerstitial damage index score, extracellular matrix (ECM) deposition, and the expressions of TGF-β1, connective tissue growth factor (CTGF), α-SMA, fibronectin, collagen I, III, Smad2/3, phosphorylated-Smad2/3, and Smad7 were measured. In addition, the expressions of CTGF, α-SMA, fibronectin, collagen I, III, Smad2/3, phosphorylated-Smad2/3, and Smad7 were measured in TGF-β1-stiumlated NRK-49F cell line. AS-IV significantly decreased UUO-induced renal fibrosis and functional impairment, which are associated with inhibition of TGF-β1, CTGF, α-SMA, and collagen matrix expression, and a decrease in serum creatinine and urea nitrogen. The renoprotective effects of AS-IV on fibrosis were associated with up-regulation of Smad7, thereby blocking up-regulations of TGF-β1, CTGF, and α-SMA, and activation of phosphorylated-Smad2/3. These effects were further conformed in NRK-49F cell line stimulated by TGF-β1. Moreover, knockdown of Smad7 gene in NRK-49F cells was able to prevent AS-IV-induced inhibition to Smad2/3 signaling activation, expression of CTGF, α-SMA, and ECM proteins in response to TGF-β1. Renal tubulointerstitial fibrosis was attenuated by treatment with AS-IV, which was closely related to induction of Smad7, thereby inhibiting TGF-β/Smad signaling.