Background. Diabetic nephropathy (DN) is a common and serious complication of diabetes, but without a satisfactory treatment strategy till now. Liuwei Dihuang pills (LDP), an effective Chinese medicinal formula, has been used to treat DN for more than 1000 years. However, its underlying mechanism of action is still vague. Methods. Active compounds and corresponding targets of LDP were predicted from the TCMSP database. DN disease targets were extracted from the OMIM, GeneCards, TTD, DisGeNET, and DrugBank databases. Subsequently, the “herbal-compound-target” network and protein-protein interaction (PPI) network were constructed and analyzed via the STRING web platform and Cytoscape software. GO functional and KEGG pathway enrichment analyses were carried out on the Metascape web platform. Molecular docking utilized AutoDock Vina and PyMOL software. Results. 41 active components and 186 corresponding targets of LDP were screened out. 131 common targets of LDP and DN were acquired. Quercetin, kaempferol, beta-sitosterol, diosgenin, and stigmasterol could be defined as five crucial compounds. JUN, MAPK8, AKT1, EGF, TP53, VEGFA, MMP9, MAPK1, and TNF might be the nine key targets. The enrichment analysis showed that common targets were mainly associated with inflammation reaction, oxidative stress, immune regulation, and cell apoptosis. AGE-RAGE and IL-17 were the suggested two significant signal pathways. Molecular docking revealed that the nine key targets could closely bind to their corresponding active compounds. Conclusion. The present study fully reveals the multicompound’s and multitarget’s characteristics of LDP in DN treatment. Furthermore, this study provides valuable evidence for further scientific research of the pharmacological mechanisms and broader clinical application.