Background. Diabetic nephropathy (DN) is the most common microvascular complication of diabetes and has become the second leading cause of end-stage renal disease in the world. This study aims to clarify the regulatory mechanism of the lncRNA MSC-AS1/miR-325/cyclin G1 (CCNG1) axis in DN. Methods. The regulatory mechanism of lncRNA MSC-AS1/miR-325/CCNG1 was evaluated by RT-qPCR, CCK-8 assay, flow cytometry assay, RNA pull-down assay, ELISA, and western blot assay. Results. Upregulation of lncRNA MSC-AS1 was detected in DN patients and HRMC cells treated with high glucose (HG). Knockdown of lncRNA MSC-AS1 reduced the proliferation, fibrosis, and inflammation of HRMC cells induced by HG. In addition, lncRNA MSC-AS1 acts as a miR-325 sponge in the DN. CCNG1 is the direct target of miR-325, which can be positively regulated by lncRNA MSC-AS1 in DN. More importantly, downregulation of miR-325 and upregulation of CCNG1 can attenuate the protective effect of lncRNA MSC-AS1 knockdown on DN. Conclusion. lncRNA MSC-AS1 aggravates DN by downregulating miR-325 and upregulating CCNG1.