This study discussed the effect of Tangzhiqing granules on podocyte epithelial-mesenchymal transition in kidney of diabetic rats. The diabetic rats were divided randomly into five groups: DM group treated with vehicle, Tangzhiqing granules low-dose treatment group, Tangzhiqing granules middle-dose treatment group, and Tangzhiqing granules high-dose treatment group. Eight Wistar rats used as control group were given saline solution. The intervention was all intragastric administration for 8 weeks. At the end of the 8 weeks, biochemical parameters and kidney weight/body weight ratio were measured. The kidney tissues were observed under light microscope and transmission electron microscopy. To search for the underlying mechanism, we examined the epithelial-to-mesenchymal transition (EMT) related molecular markers and TGF-β/smad signaling pathway key proteins expression. The results showed that Tangzhiqing granules relieved the structural damage and functional changes of diabetic kidneys. Kidney podocyte EMT related molecular markers nephrin and CD2AP expression were increased, when desmin and α-SMA levels were decreased by Tangzhiqing granules in diabetic rats. Further TGF-β/smad signaling pathway key proteins TGF-β1 and p-smad2/3 levels were decreased in diabetic rats after treatment with Tangzhiqing granules. These findings suggest that Tangzhiqing granules may protect the podocytes of diabetic nephropathy rats via alleviating podocyte EMT and likely activating TGFβ/smad signaling pathway.