Endoplasmic reticulum (ER) stress, resulting from the accumulation of misfolded and/or unfolded proteins in ER membranes, is involved in the pathogenesis of diabetic nephropathy (DN). The aim of this study was to investigate the role of ER stress inhibitors ursodeoxycholic acid (UDCA) and 4-phenylbutyrate (4-PBA) in the treatment of DN in db/db mice. Findings have revealed that diabetic db/db mice were more hyperglycemic than their non-diabetic controls, and exhibited a marked increase in body weight, water intake, urine volume, fasting plasma glucose, systolic blood pressure, glucose and insulin tolerance. UDCA (40 mg/kg/day) or 4-PBA (100 mg/kg/day) treatment for 12 weeks resulted in an improvement in these biochemical and physical parameters. Moreover, UDCA or 4-PBA intervention markedly decreased urinary albuminuria and attenuated mesangial expansion in diabetic db/db mice, compared with db/db mice treated with vehicle. These beneficial effects of UDCA or 4-PBA on DN were associated with the inhibition of ER stress, as evidenced by the decreased expression of BiP, phospho-IRE1α, phospho-eIF2α, CHOP, ATF-6 and spliced X-box binding protein-1 in vitro and in vivo. UDCA or 4-PBA prevented hyperglycemia-induced or high glucose (HG)-induced apoptosis in podocytes in vivo and in vitro via the inhibition of caspase-3 and caspase-12 activation. Autophagy deficiency was also seen in glomeruli in diabetic mice and HG-incubated podocytes, exhibiting decreased expression of LC3B and Beclin-1, which could be restored by UDCA or 4-PBA treatment. Taken together, our results have revealed an important role of ER stress in the development of DN, and UDCA or 4-PBA treatment may be a potential novel therapeutic approach for the treatment of DN.