Fibronectin is a blood and extracellular matrix glycoprotein that plays important roles in wound healing and fibrosis since it controls the deposition of collagen and other extracellular matrix molecules and is a substrate for infiltrating lymphocytes. Using a high-affinity fibronectin-binding peptide (FUD/pUR4) that inhibits fibronectin deposition into extracellular matrix (ECM), we tested the ability of a PEGylated FUD/pUR4 (PEG-FUD) to inhibit fibrosis in the Unilateral Ureteral Obstruction (UUO) kidney disease model. Fibronectin fibrillogenesis assays, using human fibroblasts and human proximal tubular epithelial cultures, showed that PEG-FUD can inhibit fibronectin fibrillogenesis in vitro with an IC50 similar to unconjugated FUD, in the order of 20–35 nM. In contrast, a mutated FUD (mFUD) conjugated to PEG that lacked activity did not inhibit fibronectin assembly, even at 20 μM. The in vivo activity of PEG-FUD was tested in the murine UUO model by daily subcutaneous injection of 12.5 mg/kg for 7 days until harvest at day 10. Control treatments included saline, PEG, unconjugated FUD, and PEG-mFUD. Immunoblotting studies showed that fibronectin was enriched in the extracellular matrix fractions of extracted UUO kidneys, compared to contralateral untreated kidneys. In vivo, PEG-FUD significantly decreased fibronectin by ~70% in UUO kidneys as determined by both IHC and immunoblotting, respectively. In contrast, neither PEG-mFUD, PEG, nor saline had any significant effect. PEG-FUD also decreased collagens I and III and CD45-expressing cells (leukocytes) by ~60% and ~50%, as ascertained by picrosirius red staining and IHC, respectively. Immunoblotting studies also showed that the fibronectin remaining after PEG-FUD treatment was intact. Utilizing a custom-made polyclonal antibody generated against pUR4/FUD, intact PEG-FUD was detected by immunoblotting in both the ECM and lysate fractions of UUO kidneys. No adverse reaction or event was noted with any treatment. In summary, these studies suggest that PEG-FUD reached the kidneys without degradation, and decreased fibronectin incorporation into interstitial tissue. Decreased fibronectin was accompanied by a decrease in collagen and leukocyte infiltration. We propose that PEG-FUD, a specific inhibitor of fibronectin assembly, may be a candidate therapeutic for the treatment of fibrosis in kidney diseases.