Hyperglycemia-induced oxidative stress plays a vital role in the progression of diabetic nephropathy. The renoprotective nature of taurine has also been reported earlier; but little is known about the mechanism of this beneficial action. The present study has, therefore, been carried out to explore in detail the mechanism of the renoprotective effect of taurine under diabetic conditions. Diabetes was induced in rats by alloxan (single i.p. dose of 120 mg/kg body weight) administration. Taurine was administered orally for 3 weeks (1% w/v in drinking water) either from the day on which alloxan was injected or after the onset of diabetes. Alloxan-induced diabetic rats showed a significant increase in plasma glucose, enhanced the levels of renal damage markers, plasma creatinine, urea nitrogen and urinary albumin. Diabetic renal injury was associated with increased kidney weight to body weight ratio and glomerular hypertrophy. Moreover, it increased the productions of reactive oxygen species, enhanced lipid peroxidation and protein carbonylation in association with decreased intracellular antioxidant defense in the kidney tissue. In addition, hyperglycemia enhanced the levels of proinflammatory cytokins (TNF-α, IL-6, IL-1β) and Na(+)--K(+)-ATPase activity with a concomitant reduction in NO content and eNOS expression in diabetic kidney. Investigation of the oxidative stress-responsive signaling cascades showed the upregulation of PKCα, PKCβ, PKCε and MAPkinases in the renal tissue of the diabetic animals. However, taurine administration decreased the elevated blood glucose and proinflammatory cytokine levels, reduced renal oxidative stress (via decrease in xanthine oxidase activity, AGEs formation and inhibition of p47phox/CYP2E1 pathways), improved renal function and protected renal tissue from alloxan-induced apoptosis via the regulation of Bcl-2 family and caspase-9/3 proteins. Taurine supplementation in regular diet could, therefore, be beneficial to regulate diabetes-associated renal complications.