Diabetic kidney disease (DKD) is the leading cause of chronic kidney disease (CKD) and a growing public health problem worldwide. Losartan potassium (Los), an angiotensin II receptor blocker, has been used to treat DKD clinically. Recently, multi-herbal formula has been shown to exhibit therapeutic activities in DKD in China. Thus, we aimed to explore the protective effects of combination of Los and Qi-Bang-Yi-Shen formula (QBF) on DKD rats. Streptozotocin (STZ) injection was used to establish a rat model of DKD. Next, the bloodurea nitrogen (BUN), creatinine (CRE) and uric acid (UA) levels were detected in serum samples from DKD rats. Hematoxylin and eosin (H&E), periodic Acid Schiff (PAS) and Masson staining were performed to observe glomerular injury and glomerular fibrosis in DKD rats. In this study, we found that QBF or Los treatment could decrease serum BUN, CRE, UA levels and reduce urine albumin-to-creatinine ratio (ACR) in DKD rats. Additionally, QBF or Los treatment obviously inhibited glomerular mesangial expansion and glomerular fibrosis, attenuated glomerular injury in kidney tissues of DKD rats. Moreover, QBF or Los treatment significantly reduced PI3K, AKT and ERK1/2 protein expressions, but increased PPARγ level in kidney tissues of DKD rats. As expected, combined treatment of QBF and Los could exert enhanced reno-protective effects compared with the single treatment. Collectively, combination of QBF and Los could ameliorate renal injury and fibrosis in DKD rats via regulating PI3K/AKT, ERK and PPARγ signaling pathways. These findings highlight the therapeutic potential of QBF to prevent DKD progression.