Dipeptidyl peptidase (DPP) IV inhibitors are probably beneficial for preventing diabetic complication and modulating glucagonlike peptide-1 receptor (GLP-1R) expression. The aim of this study was to determine whether the DPP IV inhibitor LAF237 (vildagliptin) has renoprotective qualities in streptozotocin-induced diabetic rats. Diabetic and nondiabetic rats were treated with an oral dose of 4 or 8 mg/kg/day LAF237 or placebo for 24 weeks, and renal injury was observed by light and electron microscopy. We also assessed DPP IV activity, active GLP-1 level, cAMP and 8-hydroxy-deoxyguanosine excretion, and GLP-1R, cleaved caspase 3, and transforming growth factor-1 (TGF-1) expression. LAF237 significantly decreased proteinuria, albuminuria, and urinary albumin/creatinine ratio, improved creatinine clearance, and dose-dependently inhibited interstitial expansion, glomerulosclerosis, and the thickening of the glomerular basement membrane in diabetic rats. It is noteworthy that LAF237 markedly down-regulated DPP IV activity and increased active GLP-1 levels, which probably prevented oxidative DNA damage and renal cell apoptosis by activating the GLP-1R and modulating cAMP. Renoprotection was also associated with a reduction in TGF-1 overexpression. Our study suggests that DPP IV inhibitors may ameliorate diabetic nephropathy as well as reduce the overproduction of TGF-1. The observed renoprotection is probably attributable to inhibition of DPP IV activity, mimicking of incretin action, and activation of the GLP-1R.