The NF-κB pathway plays an important role in chronic inflammatory and autoimmune diseases. Recently, NF-κB has also been suggested as an important mechanism linking obesity, inflammation, and metabolic disorders. However, there is no current evidence regarding the mechanism of action of NF-κB inhibition in insulin resistance and diabetic nephropathy in type 2 diabetic animal models. We investigated the effects of the NF-κB inhibitor celastrol in db/db mice. The treatment with celastrol for 2 months significantly lowered fasting plasma glucose (FPG), HbA1C and homeostasis model assessment index (HOMA-IR) levels. Celastrol also exhibited significant decreases in body weight, kidney/body weight and adiposity. Celastrol reduced insulin resistance and lipid abnormalities and led to higher plasma adiponectin levels. Celastrol treatment also significantly mitigated lipid accumulation and oxidative stress in organs including the kidney, liver and adipose tissue. The treated group also exhibited significantly lower creatinine levels and urinary albumin excretion was markedly reduced. Celastrol treatment significantly lowered mesangial expansion and suppressed type IV collagen, PAI-1 and TGFβ1 expressions in renal tissues. Celastrol also improved abnormal lipid metabolism, oxidative stress and proinflammatory cytokine activity in the kidney. In cultured podocytes, celastrol treatment abolished saturated fatty acid-induced proinflammatory cytokine synthesis. Taken together, celastrol treatment not only improved insulin resistance, glycemic control and oxidative stress, but also improved renal functional and structural changes through both metabolic and anti-inflammatory effects in the kidney. These results suggest that targeted therapy for NF-κB may be a useful new therapeutic approach for the management of type II diabetes and diabetic nephropathy.