Hyperinsulinemia has been implicated in the development of diabetic nephropathy. In the present study we compared the renoprotective effects of the thiazolidinedione, pioglitazone (PGZ), to that of insulin in a hypertensive, obese, type II diabetic rat model. PGZ aggravated obesity and gave less glycemic control than insulin. However, renoprotection was markedly better with PZG compared to insulin as shown by lower proteinuria, improved renal function, and less histological evidence of diabetic glomerular and tubulointerstitial lesions. PZG and insulin both reduced renal accumulation of pentosidine and oxidative stress to a similar extent. In contrast, PGZ but not insulin suppressed enhanced transforming growth factor-beta (TGF-beta) expression. We further confirmed in cultured rat proximal tubular cells that insulin enhanced TGF-beta mRNA expression and protein production. Our results identify hyperinsulinemia and the attendant increase of TGF-beta expression as potential therapeutic targets in diabetes independent of glycemic control. This confirms prior clinical evidence that PZG provides renoprotection in obese, diabetic patients with nephropathy.