Diabetic nephropathy may occur, in part, as a result of intrarenal oxidative stress. NADPH oxidases comprise the only known dedicated reactive oxygen species (ROS)-forming enzyme family. In the rodent kidney, three isoforms of the catalytic subunit of NADPH oxidase are expressed (Nox1, Nox2, and Nox4). Here we show that Nox4 is the main source of renal ROS in a mouse model of diabetic nephropathy induced by streptozotocin administration in ApoE 2/2 mice. Deletion of Nox4, but not of Nox1, resulted in renal protection from glomerular injury as evidenced by attenuated albuminuria, preserved structure, reduced glomerular accumulation of extracellular matrix proteins, attenuated glomerular macrophage infiltration, and reduced renal expression of monocyte chemoattractant protein-1 and NF-kB in streptozotocin-induced diabetic ApoE 2/2 mice. Importantly, administration of the most specific Nox1/4 inhibitor, GKT137831, replicated these renoprotective effects of Nox4 deletion. In human podocytes, silencing of the Nox4 gene resulted in reduced production of ROS and downregulation of proinflammatory and profibrotic markers that are implicated in diabetic nephropathy. Collectively, these results identify Nox4 as a key source of ROS responsible for kidney injury in diabetes and provide proof of principle for an innovative small molecule approach to treat and/or prevent chronic kidney failure.