ABSTRACT: Purpose: Our study clarifies the mechanism of Huangqi decoction (HQD) against DKD in diabetic db/db mice. Methods: Eight-week-old male diabetic db/db mice were randomly divided into four groups: Model (1% CMC), HQD-L (0.12 g/kg), HQD-M (0.36 g/kg), and HQD-H (1.08 g/kg) groups. Non-diabetic db/m mice were used as a control group. These mice received HQD treatment for 8 weeks continuously. After 8 weeks of feeding, kidneys were harvested to observe the kidney function, pathological changes, micro-assay study, and the protein expression levels. Results: HQD treatment improved the albumin/creatine ratio (ACR) and 24 h urinary albumin, prevented the pathological phenotypes of increased glomerular volume, widened mesangial areas, the proliferation of mesangial matrix, the disappearance of foot processes, the decreased expression of nephrin and the number of podocytes. The expression profile chips were assessed to reveal the global transcriptional response and predict related functions, diseases and pathways. To verify this, we found that HQD treatment activated the protein expressions of BMP1, BMP7, BMPR2, and active-Rap1 and inhibited Smad1 and phospho-ERK. In addition, HQD could improve lipid deposition in the kidneys of db/db mice. Conclusion: HQD prevents the progression of DKD in db/db mice by regulating the transcription of BMPs and their downstream target genes, inhibiting the phosphorylation of ERK and Smad1 by promoting the binding of Rap1 to GTP and regulating the lipid metabolism dysfunction. These provide a new idea for the treatment of DKD. Overall, HQD had a significant protective effect against DKD. This may be related to the fact that HQD promotes the transcription of BMPs and their downstream target genes by upregulating BMPR-II and regulates the phosphorylation of ERK and Smad by promoting the binding of Rap1 to GTP. In addition, HQD also has a noticeable role in regulating lipid metabolism dysfunction in DKD, which provides a new idea for future research on HQD.