The aim of this study was to investigate the protective action of licorice in diabetic nephropathy in male rats. Diabetes was induced in male Wistar rats by using streptozotocin (60 mg/kg body weight). Daily oral ingestion (1 g/kg body weight) of licorice extract for 60 days after the onset of diabetes reversed the adverse effect of diabetes on rats. Licorice extract alleviated blood glucose levels, restored renal function, and attenuated body-weight loss. In addition, licorice extract modulated the adverse effect of diabetes on renal malondialdehyde, glutathione, superoxide dismutase, and catalase activity. Further, licorice extract restored the total antioxidant capacity of diabetic rat kidneys. The biochemical analyses were reinforced by histologic investigations, where focal segmental glomerulosclerosis, tubular damage, and hyperemic kidney were the histologic changes seen in diabetic, but not in treated, rats. In conclusion, the biochemical analysis and the histologic investigations of diabetic rat kidneys treated with licorice extract revealed that licorice may have a potential therapeutic effect for diabetes due to its antioxidant and -hyperglycemic properties.