TGF-ß signal pathway activation is vital in the pathogenesis of DKD. We aim to investigate the role of Yishenhuoxue formula on TGF-ß/Smad signal transduction in DKD rats. 60 male adult Wistar rats were enrolled and randomly allocated into four groups: N group, M group (given STZ 60mg/kg, ip), H group (given Yishenhuoxue formula 1.0g/kg/day, ig) and L group (given Yishenhuoxue formula 0.5g/kg/day, ig). The levels of BW, 24h UV, SCr, UCr, mALB were measured after 8 weeks treatment, while the levels of KW/BW index, CCr and UAER were calculated by relevant formula. The rats' left kidneys were harvested to detect histological changes by PAS staining and right kidneys were harvested to detect the levels of TGF-ß, Smad2/3, phosphorylated Smad 2/3, Smad 7 and CTGF by western blot analysis. We found that Yishenhuoxue formula treatment can protect kidneys from DKD injury, which is illustrated with following criteria: 1) a significant decrement in KW/BW index, 24h UV, SCr, mALB and UAER, while a significant increment in BW, UCr, CCr (p<0.05 vs. M group); 2) minor and segmental changes as slight expansion of the glomerular basement membrane compared with M group; 3) an apparent decrease in levels of TGF-ß1, phosphorylated Smad 2/3 and CTGF, while an apparent increase in levels of Smad 2/3 and Smad7 compared with M group (p<0.05). The studies confirm that Yishenhuoxue formula has strong inhibitory effect on TGF-ß/Smad signal transduction in DKD rats' kidneys by decreasing expression of TGF-ß1, weakening of Smad 2/3 phosphorylation and increasing expression of Smad 7.