Renal interstitial fibrosis (RIF) represents an irreversible and progressive pathological manifestation of chronic renal disease, which ultimately leads to end‐stage renal disease. Long noncoding RNAs (lncRNAs) have been suggested to be involved in the progression of RIF. Small nucleolar RNA host gene 16 (SNHG16), a member of lncRNAs, has been found to be involved in the progression of pulmonary fibrosis. This paper first researched the effect of SNHG16 on renal fibrosis. We established a unilateral ureteral obstruction (UUO)‐induced mouse RIF model by ligation of the left ureter to evaluate the biological function of SNHG16 in RIF. As a result, SNHG16 was upregulated in UUO‐induced renal fibrotic tissues. Knockdown of SNHG16 inhibited RIF and reduced alpha‐smooth muscle actin (α‐SMA), fibronectin, and college IV expression. miR‐205 was a target of SNHG16, and downregulated in UUO‐induced renal fibrotic tissues. Inhibition of miR‐205 promoted RIF and increased the expression of α‐SMA, college IV, and fibronectin. Overexpression of SNHG16 promoted the UUO‐induced RIF, but miR‐205 abrogated this effect of SNHG16. Histone deacetylase 5 (HDAC5) showed high expression in UUO‐induced renal fibrotic tissues. Knockdown of HDAC5 significantly reduced α‐SMA, fibronectin, and college IV expression in renal tissues of UUO‐induced mice. Inhibition of miR‐205 promoted HDAC5 expression, but knockdown of SNHG16 inhibited HDAC5 expression in renal tissues of UUO‐induced mice. In conclusion, SHNG16 is highly expressed in renal fibrotic tissues of UUO‐induced mice. Knockdown of SHNG16 may prevent UUO‐induced RIF by indirectly upregulating HDAC5 via targeting miR‐205. SHNG16 may be novel target for treating renal fibrosis.