A typical hallmark of diabetic kidney disease (DKD) is an excessive deposition of extracellular matrix (ECM) in the glomerulus and renal tubulointerstitium, leading to glomerulosclerosis and tubular interstitial fibrosis. Src homology 2 domain-containing inositol 5'-phosphatase (SHIP) is a negative regulator of the phosphatidylinositol 3-kinase/protein kinase B (PI3K/Akt) signaling. Here, we investigated the effect of SHIP on ECM deposition in diabetic mice and high glucose-stimulated human renal tubular epithelial cells (HK2 cells). The decreased SHIP and increased phospho-Akt (Ser 473, Thr 308) were found in the renal tubular cells of diabetic mice, which were accompanied by overexpression of transforming growth factor-β1 (TGF-β1), α-smooth muscle actin (α-SMA), and secreted collagen type 3 (Col 3) and a low expression of E-cadherin compared to that in normal mice. In vitro research revealed that high glucose-attenuated SHIP expression accompanied the activation of the PI3K/Akt signaling and ECM production. Knocking down SHIP in HK2 cells caused an increase in the levels of phospho-Akt (Ser 473), phospho-Akt (Thr 308), TGF-β1, α-SMA, and secreted Col 3 and a decrease in E-cadherin. Again, either the M90-SHIP plasmid or the PI3K/Akt pathway inhibitor LY294002 could significantly prevent the high glucose-induced increase in TGF-β1, α-SMA, and secreted Col 3 and decreased E-cadherin. Furthermore, we confirmed that inhibition of the TGF-β1 pathway with SB431542 blocked the effect of SHIP knockdown on ECM production in HK2 cells. In summary, our study suggests that decreased SHIP mediates high glucose-induced TGF-β1 upregulation and ECM deposition through activation of the PI3K/Akt pathway in renal tubular cells. J. Cell. Biochem. 118: 2271-2284, 2017. © 2017 Wiley Periodicals, Inc.