Toll like receptor (TLR) 4 has been reported to promote inflammation in diabetic nephropathy. However the role of TLR4 in the complicated pathophysiology of diabetic nephropathy is not understood. In this study, we report elevated expression of TLR4, its endogenous ligands and downstream cytokines, chemokines and fibrogenic genes in diabetic nephropathy in WT mice with streptozotocin (STZ) diabetes. Subsequently, we demonstrated that TLR4-/- mice were protected against the development of diabetic nephropathy, exhibiting less albuminuria, inflammation, glomerular hypertrophy and hypercellularity, podocyte and tubular injury as compared to diabetic wild-type controls. Marked reductions in interstitial collagen deposition, myofibroblast activation (α-SMA) and expression of fibrogenic genes (TGF-β and fibronectin) were also evident in TLR4 deficient mice. Consistent with our in vivo results, high glucose directly promoted TLR4 activation in podocytes and tubular epithelial cells in vitro, resulting in NF-κB activation and consequent inflammatory and fibrogenic responses. Our data indicate that TLR4 activation may promote inflammation, podocyte and tubular epithelial cell injury and interstitial fibrosis, suggesting TLR4 is a potential therapeutic target for diabetic nephropathy.