Diabetic nephropathy (DN) is a common complication of diabetes and it is urgent to develop effective therapies for DN. In this study, high‐sucrose and high‐fat diet combined with streptozotocin was used to induce DN in rats to observe the effects of natural flavonoid ombuin on renal function, inflammation, and interstitial fibrosis. Immunohistochemistry and western blotting analysis were used to detect protein expression levels. Results showed that ombuin significantly improved renal function and pathological injury, inhibited accumulation of advanced glycation end‐products, suppressed the release of inflammatory cytokines, and improved renal interstitial fibrosis in DN rats. Ombuin also significantly downregulated the expressions of transforming growth factor beta1 (TGF‐β1), connective tissue growth factor (CTGF), fibronectin (FN), p65, phosphorylated (p)‐p65, Cleaved‐Notch 1, and hairy and enhancer of split 1 (Hes 1), and upregulated the expression of peroxisome proliferator‐activated receptor γ (PPAR γ). When PPAR γ activity was inhibited by T0070907, the effects of ombuin on improving DN were significantly reversed, and the expressions of TGF‐β1, FN, CTGF, p‐p65, and p65 increased, while the expressions of Cleaved‐Notch 1 and Hes 1 were not significantly affected. These results suggest that ombuin may activate PPAR γ to exert anti‐inflammatory and antifibrotic effects by inhibiting Notch 1 activity in DN. It is also possible that ombuin acts on these two independent signal pathways synchronously.