Inflammation and its consequent fibrosis are two main features of diabetic nephropathy (DN), but target therapy on these processes for DN remains yet ineffective. We report here that miR-29b is a novel therapeutic agent capable of inhibiting progressive renal inflammation and fibrosis in type 2 diabetes in db/db mice. Under diabetic conditions, miR-29b was largely downregulated in response to advanced glycation end (AGE) product, which was associated with upregulation of collagen matrix in mesangial cells via the transforming growth factor-β (TGF-β)/Smad3-dependent mechanism. These pathological changes were reversed by overexpressing miR-29b, but enhanced by knocking-down miR-29b. Similarly, loss of renal miR-29b was associated with progressive diabetic kidney injury, including microalbuminuria, renal fibrosis, and inflammation. Restored renal miR-29b by the ultrasound-based gene therapy was capable of attenuating diabetic kidney disease. Further studies revealed that inhibition of Sp1 expression, TGF-β/Smad3-dependent renal fibrosis, NF-κB-driven renal inflammation, and T-bet/Th1-mediated immune response may be mechanisms associated with miR-29b treatment in db/db mice. In conclusion, miR-29b may play a protective role in diabetic kidney disease and may have therapeutic potential for diabetic kidney complication.